/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/230424.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, April 24, 2023, Vol. 27, No. 113 Headlines 10601 SW 67TH CT: Voluntary Chapter 11 Case Summary 511 GROUP LLC: Seeks to Extend Plan Exclusivity to July 23 59 NORTH 6TH STREET: Seeks to Hire Goetz Fitzpatrick as Counsel ACJK INC: Taps Keith Short & Associates as Litigation Counsel AH DEVELOPMENT: Seeks to Hire Boyle Legal as Bankruptcy Counsel ARCHROCK PARTNERS: Moody's Affirms B1 CFR, Outlook Remains Stable ARRAY MIDCO: Moody's Affirms 'Caa1' CFR & Alters Outlook to Stable ASLM GAS: Seeks to Hire Michael Jay Berger as Bankruptcy Counsel ASLM INVESTMENTS: Seeks to Hire Michael Jay Berger as Legal Counsel B&G PROPERTY: Exclusivity Period Extended to June 26 BED BATH: Files for Chapter 11 to Pursue Wind Down BERTUCCI'S RESTAURANTS: Exclusivity Period Extended to April 10 BLOCKFI INC: Exclusivity Period Extended to May 15 BONA VISTA 1606: Exclusivity Period Extended to June 20 BOY SCOUTS: Exits Chapter 11 Bankruptcy, To Compensate Survivors CAN B CORP: Incurs $14.9 Million Net Loss in 2022 CARROLL COUNTY ENERGY: S&P Affirms 'BB-' Sr. Secured Debt Rating CELSIUS NETWORK: US Trustee Objects to $2.8-Mil. Exec Bonuses CFN ENTERPRISES: Incurs $9.9 Million Net Loss in 2022 CHOBANI LLC: Moody's Affirms 'B3' CFR & Alters Outlook to Positive CINEWORLD PLC: Judge Directs Return to Talks w/ National Cinemedia CIRTRAN CORP: Swings to $1.5 Million Net Loss in 2022 CLARIOS GLOBAL: Fitch Rates New $500MM Secured Notes Due 2028 'B+' CLEAN ENERGY: Posts $147K Net Profit in 2022 CORE SCIENTIFIC: Names Adam Sullivan as President Amid Bankruptcy COSMOS GROUP: Widens Net Loss to $104.1 Million in 2022 DAVID'S BRIDAL: April 24 Deadline Set for Panel Questionnaires DAVID'S BRIDAL: To Cut 9,000+ Workers Ahead of Potential Sale DEVILLE CORP: Seeks to Extend Plan Exclusivity DIAMOND SPORTS: Bonds Give 98.25% Payout at CDS Auction DIAMOND SPORTS: Wants Discounted Contracts With MLB Teams EL MONTE NATURE: Combined Disclosure & Plan Confirmed by Judge ELEMENT LLC: Placed Into Receivership ENVISION HEALTHCARE: In Talks With Creditors to Extend Grace Period FARMHOUSE CREATIVE: Unsecureds to Get $390 per Month for 5 Years FIRST PREMIER: Unsecureds Will Get 100% of Claims in 60 Months FORMA BRANDS: Acquired Out of Chapter 11 With CEO Brady FOX SUBACUTE: Sabra Health Says Disclosures Inadequate FRANKO CATH: Rental Income to Fund Plan Payments FTX GROUP: Deltec Ordered to Repay $53 Million Loan to Alameda FTX GROUP: Has Recovered $7.3 Billion During Bankruptcy FTX GROUP: May Use Creditors' Money, Raise Cash to Restart Exchange FTX GROUP: Mysten Labs Completes Repurchase of Stake FTX GROUP: Paid Bankruptcy Lawyers $32.5 Million Fees in February FTX GROUP: SBF Denied Access to D&O Insurance Coverage GEX MANAGEMENT: Incurs $1.1 Million Net Loss in 2022 GILBERT BARBEE: Seeks to Extend Plan Exclusivity to July 28 GMS INC: S&P Rates New $500MM Senior Secured Term Loan 'BB-' GREER TRANSPORT: Unsecureds Will Get 40% of Claims in Plan GYP HOLDINGS III: Moody's Rates New Senior Secured Term Loan 'Ba2' HUGHES SATELLITE: S&P Affirms 'BB' ICR, Outlook Stable INSYS THERAPEUTICS: Ex-Directors Agree to $175M Opioid-Sale Deal JANUS INTERNATIONAL: Moody's Ups CFR & Sr. Secured Term Loan to B1 JPW INDUSTRIES: S&P Downgrades ICR to 'CCC+' on Refinancing Risk KOSSOFF PLLC: Trustee Eyes Tenantracers' $2-Mil. Rent Bills LARRET PROPERTIES: Taps Chad M. Garland CPA as Accountant LEGACY CARES: Taps Miller Buckfire as it Plans Bankruptcy Filing LIFE CARE: Fitch Alters Outlook on 'BB+' IDR to Negative LSF11 TRINITY: Moody's Assigns First Time 'B2' Corp. Family Rating LTL MANAGEMENT: April 27 Deadline Set for Panel Questionnaires LTL MANAGEMENT: Plaintiffs Attys. Form Committee to Back $8.9B Deal LUXE SPACES: Unsecureds Will Get 10.99% of Claims in 48 Months MADISON SQUARE: Club Files Plan That Will Pay Abuse Claimants MARINE WHOLESALE: Exclusivity Period Extended to September 5 MIDLAND COGENERATION: Fitch Affirms BB+ Rating on $560MM Sec. Notes MISSISSIPPI CENTER: Case Summary & 20 Largest Unsecured Creditors MKS REAL ESTATE: Hilco Completes Sec. 363 Bankruptcy Sale MONTICELLO ACADEMY: S&P Lowers 2014 LT Bond Rating to 'BB+' MP ZEBULON: Amends Equity Interest & Insider Claims Pay Details MR INVESTMENTS: Twin Cities Firehouse Subs Franchisee in Chapter 11 NAUTILUS POWER: Moody's Rates $486MM Superpriority Term Loan 'B3' NAVACORD CORP: Fitch Affirms LongTerm IDRs at 'B', Outlook Stable NORDSTROM INC: Moody's Affirms Ba1 CFR & Alters Outlook to Negative NOVUSON SURGICAL: Case Summary & 20 Largest Unsecured Creditors OBSTETRIC & GYNECOLOGIC: Seeks to Extend Plan Exclusivity ODYSSEY ACADEMY: S&P Rates 2023A/2023B School Revenue Bonds 'BB' ORIGINCLEAR INC: Widens Net Loss to $10.8 Million in 2022 PANEVAS LLC: Case Summary & 20 Largest Unsecured Creditors PARTY CITY: April 28 Auction Set for Nine Additional Store Leases PLX PHARMA: Files for Chapter 11 to Sell to Greenwood PRESTIGE CONSTRUCTION: Continued Operations to Fund Plan QUALITY HEATING: Gets OK to Hire Epiq as Claims and Noticing Agent R1 RCM: Fitch Alters Outlook on 'BB' LongTerm IDR to Positive REMARK HOLDINGS: Swings to $55.5 Million Net Loss in 2022 RENNOVA HEALTH: Posts $334.2 Million Net Loss in 2022 REVLON INC: Settlement With DOJ Appeal Clears Way for Ch. 11 Exit RICH'S DELICATESSEN: Amends SBA & IRS Secured Claims Pay Details RICH'S FOOD: Amends Plan to Include IRS Secured Claim Pay RWDY INC: Seeks to Extend Plan Exclusivity to July 19 SAN JORGE CHILDREN'S: Seeks to Extend Filing Period by 21 Days SAS AB: Delays $26.4 Million Bond Interest Payment SAS AB: Exclusivity Period Extended to July 31 SCF LLC: Seeks to Extend Plan Exclusivity to July 24 SCHIERHOLZ AND ASSOCIATES: Unsecureds to Get Share of Gross Revenue SEABURY: Fitch Affirms LongTerm IDR at 'BB', Outlook Stable SORRENTO THERAPEUTICS: Scilex Holdings Wants to Sell Shares SOUTHERN CLEANING: Case Summary & 20 Largest Unsecured Creditors STRUCTURLAM MASS: Case Summary & 30 Largest Unsecured Creditors SUN PACIFIC: Swings to $278,610 Net Loss in 2022 TALEN ENERGY: Fitch Gives 'BB-' LongTerm IDR, Outlook Stable USA COMPRESSION: Moody's Affirms 'B1' CFR, Outlook Remains Stable VERITAS FARMS: Incurs $5.1 Million Net Loss in 2022 VESTA HOLDINGS: Updates Liquidating Plan Disclosures VICE MEDIA: Taps Interim Finance Chief as it Searches for Buyer VIDEO RIVER: Posts $767K Net Income in 2022 VILLAS OF COCOA: First Amended Plan Confirmed by Judge VIRGIN ORBIT: Files Chapter 11 Plan, Bids Due May 14 VITAL PHARMACEUTICALS: Seeks to Extend Plan Exclusivity to August 4 VOYAGER DIGITAL: 2nd Circuit Puts $1-Bil. Binance Deal on Hold WORTH COLLECTION: Bankruptcy Trustee Sues Buyout Firms ********* 10601 SW 67TH CT: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: 10601 SW 67th Ct LLC 1300 NW 84th Ave Doral Fl 33126 Chapter 11 Petition Date: April 21, 2023 Court: United States Bankruptcy Court Southern District of Florida Case No.: 23-13112 Debtor's Counsel: Aubrey G. Rudd, Esq. LAW OFFICE OF AUBREY G. RUDD, ESQ. 100 Edgewater Dr. #312 Miami, FL 33133 Tel: 305-310-3871 Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Soranyi Sosa as managing member. The Debtor filed an empty list of its 20 largest unsecured creditors. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/FB4GYWY/10601_SW_76_Ct_LLC__flsbke-23-13112__0001.0.pdf?mcid=tGE4TAMA 511 GROUP LLC: Seeks to Extend Plan Exclusivity to July 23 ---------------------------------------------------------- 511 Group, LLC asks the U.S. Bankruptcy Court for the Southern District of Florida to extend its exclusive period to file a plan from April 19, 2023 to July 23, 2023, and to solicit acceptances thereof to September 23, 2023. The Debtor explained that although it has been negotiating with creditors towards a consensual plan, additional time is needed due to a proposed sale of the property of the estate. 511 Group, LLC is represented by: Joel M. Aresty, Esq. JOEL M. ARESTY, P.A. 309 1st Ave S Tierra Verde, FL 33715 Tel: (305) 904-1903 Email: aresty@mac.com About 511 Group 511 Group, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 22-19644) on Dec. 19, 2022, with up to $1 million in assets and up to $500,000 in liabilities. Judge Robert A. Mark oversees the case. Joel M. Aresty, Esq., at Joel M. Aresty, P.A. is the Debtor's legal counsel. 59 NORTH 6TH STREET: Seeks to Hire Goetz Fitzpatrick as Counsel --------------------------------------------------------------- 59 North 6th Street, LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of New York to employ Goetz Fitzpatrick, LLP as its counsel. The firm will render these services: (a) advise the Debtor with respect to its powers and duties; (b) prepare legal papers; (c) represent the Debtor in the prosecution and defense of various claims; and (d) perform all other legal services for the Debtor. The firm has been paid a pre-bankruptcy retainer of $20,000 from the Debtor. Gary Kushner, Esq., a partner at Goetz Fitzpatrick, disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Gary Kushner, Esq. Goetz Fitzpatrick, LLP 1 Penn Plaza 31st Floor New York, NY 10119 Telephone: (212) 695-8100 Email: gkushner@goetzfitz.com About 59 North 6th Street 59 North 6th Street LLC is a Single Asset Real Estate (as defined in 11 U.S.C. Sec. 101(51B)). The Debtor owns in fee simple title a property located at 59 North 6th Street Brooklyn, NY 11249 valued at $26 million. 59 North 6th Street filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 23-41149) on April 3, 2023. In the petition filed by Rehan Perveez, managing member, the Debtor reported total assets of $26,000,000 and total liabilities of $26,032,348. Judge Nancy Hershey Lord oversees the case. Gary Kushner, Esq., at Goetz Fitzpatrick LLP serves as the Debtor's counsel. ACJK INC: Taps Keith Short & Associates as Litigation Counsel ------------------------------------------------------------- ACJK, Inc. seeks approval from the U.S. Bankruptcy Court for the Southern District of Illinois to employ Keith Short & Associates as special counsel. The Debtor requires a special counsel to represent it in litigation seeking damages from Optum, RX and as successor to Catamaran Corporation for breach of contract, breach of duty of good faith and fair dealing, conversion, unfair competition, and unfair trade practices. Keith Short, Esq., an attorney at Keith Short & Associates, disclosed in a court filing that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Keith Short, Esq. Keith Short & Associates 325 Market St. Alton, IL 62002 Telephone: (618) 254-0055 About ACJK Inc. ACJK Inc., doing business as Medicap Pharmacy, is a local pharmacy that offers services such as immunizations, medication therapy management, multi-dose packaging, medication synchronization, important health screenings, and expert care. On the Web: https://granitecity.medicap.com/ ACJK filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ill. Case No. 23-30045) on January 30, 2023. In the petition filed by Mark Allen, manager, the Debtor reported $1 million to $10 million in both assets and liabilities. Judge Laura K. Grandy oversees the case. The Debtor tapped Michael J Benson, Esq., at A Bankruptcy Law Firm, LLC as bankruptcy counsel and Mark Cuker, Esq., at Jacobs Law Group, PC and Keith Short, Esq., at Keith Short & Associates as litigation counsel. AH DEVELOPMENT: Seeks to Hire Boyle Legal as Bankruptcy Counsel --------------------------------------------------------------- AH Development Group, LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of New York to employ Boyle Legal, LLC as its bankruptcy counsel. The firm will render these services: (a) advise the Debtor with respect to its powers and duties in the continued operation of its business and in its management of its property; (b) take necessary actions to avoid liens against the Debtor's property, remove restraints against its property and such other actions to remove any encumbrances and liens; (c) take necessary action to enjoin and stay until final decree herein any attempts by secured creditors to enforce liens upon property of the Debtor; (d) represent the Debtor in any proceedings which may be instituted in this court by creditors or other parties in interest during the course of this proceeding; (e) prepare legal papers; and (f) perform all other legal services. Michael Boyle, Esq., a partner at Boyle Legal, will be paid at his hourly rate of $325. The firm received an initial retainer of $6,850 from the Debtor. Mr. Boyle disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Michael L. Boyle, Esq. Boyle Legal, LLC 64 2nd Street Troy, NY 12180 Telephone: (518) 407-3121 Email: mike@boylebankruptcy.com About AH Development Group AH Development Group LLC owns various real estate holdings located throughout the City of Albany, N.Y., having an aggregate value of $1,037,000. AH Development Group sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D.N.Y. Case No. 23-10387) on April 17, 2023. In the petition signed by Ben Gaspard, managing member, the Debtor disclosed $1,037,000 in total assets and up to $944,887 in liabilities. Judge Robert E. Littlefield Jr. oversees the case. Michael L. Boyle, Esq., at Boyle Legal, LLC represents the Debtor as legal counsel. ARCHROCK PARTNERS: Moody's Affirms B1 CFR, Outlook Remains Stable ----------------------------------------------------------------- Moody's Investors Service affirmed the ratings of Archrock Partners, L.P., including its B1 Corporate Family Rating and the B2 ratings on its senior unsecured notes. The SGL-3 Speculative Grade Liquidity rating is unchanged. The rating outlook is stable. "The affirmation of Archrock's ratings reflect the supportive industry conditions and improving profitability," stated James Wilkins, Moody's Vice President. "Moody's expect the company's leverage to decline on higher earnings in 2023, but for Archrock only to start generating positive free cash flow in 2024." Affirmations: Issuer: Archrock Partners, L.P. Corporate Family Rating, Affirmed B1 Probability of Default Rating, Affirmed B1-PD Backed Senior Unsecured Regular Bond/Debenture, Affirmed B2 (LGD5) from (LGD4) Outlook Actions: Issuer: Archrock Partners, L.P. Outlook, Remains Stable RATINGS RATIONALE Archrock B1 CFR reflects its leading position in natural gas compression services, basin diversity, reasonably stable gross margins, and growing US natural gas demand driving demand for the company's compression services. The company's long-term relationships with its high quality customer base, with whom it typically has fee-based contracts, provides stability. Archrock's profitability is correlated to natural gas production, which is a driver of its utilization rates. The utilization rate recovered to 93% in the fourth quarter 2022, as demand improved and aided by divestments of capacity executed by Archrock to focus on the large horsepower market (>1,000 hp per compressor unit). The company's operating horsepower at the end of 2022 was 12% lower than at the end of 2019 due to multiple sales of certain contract operations service agreements and compressors. The 2022 revenues for both the Contract Operations and Aftermarket Services segments were below pre-pandemic levels. Archrock's earnings are improving, but profit margins have yet to recover to 2019 pre-pandemic levels. Leverage will improve in 2023 as earnings grow, supported by increasing demand for natural gas, but negative free cash flow resulting from growth capital investments will add to debt levels. Moody's does not expect Archrock to generate meaningful positive free cash flow until 2024. Archrock Partners, L.P.'s senior unsecured notes issues (due in 2027 and 2028) are rated B2, one notch below the company's B1 CFR. The notes are backed by Archrock, Inc. which also guarantees the company's revolving credit facility. The notes have subsidiary guarantees and are junior to the claims under the relatively large $750 million asset-based secured revolving credit facility. The large revolver places downward pressure on the notes' rating. The SGL-3 Speculative Grade Liquidity Rating reflects adequate liquidity supported by access to a $750 million asset-based revolving credit facility that matures in November 2024. As of year-end 2022, the company had $251 million of borrowings outstanding under the revolver and $488 million of available borrowing capacity, after accounting for $5.7 million of letters of credit and borrowing constraints resulting from financial ratio requirements. Moody's expects the company to use revolver borrowings to fund any potential negative free cash flow. The credit agreement financial covenants include a minimum interest coverage of 2.5x, a maximum Senior Secured Debt to EBITDA of 3.0x, and a maximum Total Debt to EBITDA of 5.50x for the first three quarters of 2023 and 5.25x thereafter. Moody's expects the company to remain in compliance with its financial covenants through 2024. Alternate sources of liquidity are limited as its assets are pledged as collateral to the revolver and the company has already sold numerous asset packages over the past three years. Beyond the revolver, Archrock has no debt maturities until its 2027 notes maturity. The stable outlook reflects Moody's expectation that Archrock's utilization rates will remain strong, it will maintain adequate liquidity and Archrock's earnings will improve in 2023-2024. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be considered for an upgrade if the company is able to sustain debt to EBITDA below 4.5x while generating consistent positive free cash flow and maintaining conservative financial policies. The ratings could be downgraded if leverage increases, with debt to EBITDA rising above 5.5x. The principal methodology used in these ratings was Oilfield Services published in January 2023. Houston, Texas-based Archrock Partners, L.P. is a limited partnership and a leading provider of natural gas contract compression services to customers throughout the United States. Archrock, Inc., a publicly traded company, owns all of the limited partner and the general partner interests in Archrock Partners, L.P. ARRAY MIDCO: Moody's Affirms 'Caa1' CFR & Alters Outlook to Stable ------------------------------------------------------------------ Moody's Investors Service affirmed Array Midco, Corp.'s Caa1 corporate family rating, Caa1-PD probability of default rating, and Caa1 rating on its senior secured credit facilities. At the same time, Moody's has changed the outlook to stable from positive. The ratings affirmation reflects Moody's expectation that the company's revenue will grow in 2023 and 2024, however, the change in outlook to stable indicates Moody's expectation of modestly negative free cash flow and weak interest coverage, as EBITDA margins remain low. Affirmations: Issuer: Array Midco, Corp. Corporate Family Rating, Affirmed Caa1 Probability of Default Rating, Affirmed Caa1-PD Senior Secured Bank Credit Facility, Affirmed Caa1 to (LGD4) from (LGD3) Outlook Actions: Issuer: Array Midco, Corp. Outlook, Changed To Stable From Positive RATINGS RATIONALE Array's rating (Caa1 CFR) is constrained by: 1) the company's very small scale, with annual revenues of about $250 million; 2) Moody's expectation of modestly negative free cash flow and weak interest coverage in 2023 and 2024; 3) concentration risks stemming from its narrow focus on the cosmetics industry that is focusing its marketing spend online; and 4) aggressive financial policies as a result of its private equity ownership, highlighted by the company's distressed exchange in 2021. The company's rating benefits from: 1) its good market position and long-standing relationships with key customers in the cosmetics industry; 2) its good geographic diversity with operations in North America, Europe and Asia; and 3) improving cosmetics retail environment that should support revenue growth. Array has adequate liquidity. Sources of liquidity are around $36 million versus uses of around $17 million through to the end of 2023. Sources are comprised of around $16 million cash at September 30, 2022, and availability of around $20 million under its $35 million ABL revolving credit facility expiring December 2026. Uses are comprised of Moody's expected negative free cash flow of around $5 million, mandatory debt repayments of around $2 million through 2023 and $10 million drawn under Array's $17 million W&B credit facility (due May 2024) if it is not extended. Array has limited ability to generate liquidity from asset sales. There are no financial maintenance covenants in the term loan or ABL. The revolving European credit facility has modest cushion on the financial maintenance covenants that are based on the European subsidiary's (W&B) financials. The stable outlook reflects Moody's view that interest and leverage metrics will remain weak due to lower cash generation despite improving revenue. Array's first lien credit facilities have a first priority lien on all assets, and are rated Caa1, which is the same level as the corporate family rating since they make up the bulk of the company's debt capital structure. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Array showed a material improvement in its liquidity profile driven by sequential positive free cash flow, EBITDA growth, and if (EBITDA – capex) to interest is sustained above 1x. The ratings could be downgraded if Array's liquidity profile deteriorated as a result of sustained negative free cash flow or through distributions to its owners, or if the risk of a potential default, including a distressed exchange, increases for any reason. The principal methodology used in these ratings was Consumer Durables published in September 2021. Array Canada Marketing Inc., headquartered in Toronto, Ontario, is a designer, manufacturer and distributor of retail merchandising displays and fixtures for mass market and high-end cosmetics brands and retailers. Array Midco Corp. is the parent of Array Canada Marketing Inc. ASLM GAS: Seeks to Hire Michael Jay Berger as Bankruptcy Counsel ---------------------------------------------------------------- ASLM Gas, Inc. seeks approval from the U.S. Bankruptcy Court for the Central District of California to employ the Law Offices of Michael Jay Berger as its bankruptcy counsel. The firm will render these legal services: (a) communicate with creditors of the Debtor; (b) review the Debtor's Chapter 11 bankruptcy petition and all supporting schedules; (c) advise the Debtor of its legal rights and obligations in a bankruptcy proceeding; (d) work to bring the Debtor into full compliance with reporting requirements of the Office of the U.S. Trustee; (e) prepare status reports as required by the court; (f) respond to any motions filed in the Debtor's bankruptcy proceeding; and (g) respond to creditor inquiries; (h) review proofs of claim filed in the Debtor's bankruptcy and object to inappropriate claims; (i) prepare Notices of Automatic Stay in all state court proceedings in which the Debtor is sued; and (j) if appropriate, prepare a Chapter 11 Plan of Reorganization for the Debtor. The hourly rates of the firm's attorneys and staff are as follows: Michael Jay Berger, Esq. $595 Sofya Davtyan, Senior Associate Attorney $545 Carolyn M. Afari, Mid-level Associate Attorney $435 Robert Poteete, Mid-level Associate Attorney $435 Angeline Smirnoff, Associate Attorney $395 Senior Paralegals and Law Clerks $250 Bankruptcy Paralegals $200 Danish Rehman, the Debtor's principal's friend, paid the firm $15,000 retainer. Michael Jay Berger, Esq., the sole owner of the Law Offices of Michael Jay Berger, disclosed in a court filing that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Michael Jay Berger, Esq. Law Offices of Michael Jay Berger 9454 Wilshire Blvd., 6th Floor Beverly Hills, CA 90212-2929 Telephone: (310) 271-6223 Facsimile: (310) 271-9805 Email: michael.berger@bankruptcypower.com About ASLM Gas Inc. ASLM Gas, Inc. filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 23-11779) on March 24, 2023, with up to $10 million in both assets and liabilities. Gregory Kent Jones has been appointed as Subchapter V trustee. Judge Julia W. Brand oversees the case. Michael Jay Berger, Esq., at the Law Offices of Michael Jay Berger, is the Debtor's legal counsel. ASLM INVESTMENTS: Seeks to Hire Michael Jay Berger as Legal Counsel ------------------------------------------------------------------- ASLM Investments, Inc. seeks approval from the U.S. Bankruptcy Court for the Central District of California to employ the Law Offices of Michael Jay Berger as its bankruptcy counsel. The firm will render these legal services: (a) communicate with creditors of the Debtor; (b) review the Debtor's Chapter 11 bankruptcy petition and all supporting schedules; (c) advise the Debtor of its legal rights and obligations in a bankruptcy proceeding; (d) work to bring the Debtor into full compliance with reporting requirements of the Office of the U.S. Trustee; (e) prepare status reports as required by the court; (f) respond to any motions filed in the Debtor's bankruptcy proceeding; and (g) respond to creditor inquiries; (h) review proofs of claim filed in the Debtor's bankruptcy and object to inappropriate claims; (i) prepare Notices of Automatic Stay in all state court proceedings in which the Debtor is sued; and (j) if appropriate, prepare a Chapter 11 Plan of Reorganization for the Debtor. The hourly rates of the firm's attorneys and staff are as follows: Michael Jay Berger, Esq. $595 Sofya Davtyan, Senior Associate Attorney $545 Carolyn M. Afari, Mid-level Associate Attorney $435 Robert Poteete, Mid-level Associate Attorney $435 Angeline Smirnoff, Associate Attorney $395 Senior Paralegals and Law Clerks $250 Bankruptcy Paralegals $200 Danish Rehman, the Debtor's principal's friend, paid the firm $15,000 retainer. Michael Jay Berger, Esq., the sole owner of the Law Offices of Michael Jay Berger, disclosed in a court filing that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Michael Jay Berger, Esq. Law Offices of Michael Jay Berger 9454 Wilshire Blvd., 6th Floor Beverly Hills, CA 90212-2929 Telephone: (310) 271-6223 Facsimile: (310) 271-9805 Email: michael.berger@bankruptcypower.com About ASLM Investments Inc. ASLM Investments, Inc. filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 23-11778) on March 24, 2023, with up to $10 million in both assets and liabilities. Gregory Kent Jones has been appointed as Subchapter V trustee. Judge Barry Russell oversees the case. Michael Jay Berger, Esq., at the Law Offices of Michael Jay Berger, is the Debtor's legal counsel. B&G PROPERTY: Exclusivity Period Extended to June 26 ---------------------------------------------------- Judge Thomas M. Renn of the U.S. Bankruptcy Court for the District of Oregon extended B&G Property Investments, LLC's exclusivity period to June 26, 2023. B&G Property Investments, LLC is represented by: Douglas R. Ricks, Esq. VANDEN BOS & CHAPMAN, LLP 319 SW Washington St., Ste. 520 Portland, OR 97204 Tel: 503-241-4861 About B&G Property Investments B&G Property Investments, LLC, a company in Medford, Ore., filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Ore. Case No. 22-60998) on July 29, 2022, with $10 million to $50 million in both assets and liabilities. Keith Boyd, manager, signed the petition. Judge Thomas M. Renn presides over the case. Douglas R. Ricks, Esq., at Vanden Bos & Chapman, LLP represents the Debtor. The U.S. Trustee for Region 18 appointed an official committee to represent unsecured creditors in the Debtor's Chapter 11 case. The committee is represented by Farleigh Wada Witt. BED BATH: Files for Chapter 11 to Pursue Wind Down -------------------------------------------------- Bed Bath & Beyond Inc. (Nasdaq: BBBY) and certain of its subsidiaries on April 23, 2023, filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of New Jersey to implement an orderly wind down of its businesses while conducting a limited marketing process to solicit interest in one or more sales of some or all of its assets. To facilitate this process, the Company has received a commitment of approximately $240 million in debtor-in-possession financing ("DIP") from Sixth Street Specialty Lending, Inc. Following court approval, the Company expects this financing to provide the necessary liquidity to support operations during the Chapter 11 process. The Company's 360 Bed Bath & Beyond and 120 buybuy BABY stores and websites will remain open and continue serving customers as the Company begins its efforts to effectuate the closure of its retail locations. Through the filing of customary motions with the Court, the Company intends to uphold its commitments to customers, employees, and partners, including continued payment of employee wages and benefits, maintaining customer programs, and honoring obligations to critical vendors. Sue Gove, President & CEO of Bed Bath & Beyond Inc. said, "Millions of customers have trusted us through the most important milestones in their lives -- from going to college to getting married, settling into a new home to having a baby. Our teams have worked with incredible purpose to support and strengthen our beloved banners, Bed Bath & Beyond and buybuy BABY. We deeply appreciate our associates, customers, partners, and the communities we serve, and we remain steadfastly determined to serve them throughout this process. We will continue working diligently to maximize value for the benefit of all stakeholders." For decades, Bed Bath & Beyond set the standard across the home goods sector and held its position through many different economic cycles and alongside a continuously evolving customer. In late 2022, the Company initiated a significant turnaround plan to reset foundational elements of its operational and financial positioning to better serve customers, employees, and supplier partners. Actions have been underway to improve merchandise assortment, streamline supply chain, and optimize its store footprint. While the Company has commenced a liquidation sale, Bed Bath & Beyond Inc. intends to use the Chapter 11 proceedings to conduct a limited sale and marketing process for some or all of its assets. The Company has filed motions with the Court seeking authority to market Bed Bath & Beyond and buybuy BABY as part of an auction pursuant to section 363 of the Bankruptcy Code. Alongside these efforts, the Company is also strategically managing inventory to preserve value. In the event of a successful sale, the Company will pivot away from any store closings needed to implement a transaction. The Company believes this dual-path process will best maximize value. Additional information is available at https://restructuring.ra.kroll.com/bbby. Stakeholders with questions can contact the Company's Claims Agent, Kroll LLC, at BBBYInfo@ra.kroll.com, (833) 570-5355, or (646) 440-4806 if calling from outside the U.S. or Canada. About Bed Bath & Beyond Bed Bath & Beyond Inc., together with its subsidiaries, is an omnichannel retailer selling a wide assortment of merchandise in the Home, Baby, Beauty & Wellness markets and operate under the names Bed Bath & Beyond, buybuy BABY, and Harmon, Harmon Face Values. The Company also operates Decorist, an online interior design platform that provides personalized home design services. At its peak, Bed Bath & Beyond operated the largest home furnishing retailer in the United States with over 970 stores across all 50 states, consistently at the forefront of major home and bath trends. Operating stores spanning the United States, Canada, Mexico, and Puerto Rico, Bed Bath & Beyond offers everything from bed linens to cookware to electric appliances, home organization, baby care, and more. Bed Bath & Beyond closed over 430 locations across the United States and Canada before filing chapter 11 cases, implementing full scale winddowns of their Canadian business and the Harmon branded stores. Left with 360 Bed Bath & Beyond and 120 buybuy BABY stores, Bed Bath & Beyond Inc. and 73 affiliated debtors on April 23, 2023, each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code to pursue a wind down of operations. The cases are pending before the Honorable Vincent F. Papalia and have requested joint administration of the cases under Bankr. D.N.J. Lead Case No. 23-13359. Kirkland & Ellis LLP and Cole Schotz P.C. are serving as legal counsel, Lazard Frères & Co. LLC is serving as investment banker, and AlixPartners LLP is serving as financial advisor. Bed Bath & Beyond Inc. has retained Hilco Merchant Resources LLC to assist with inventory sales. Kroll LLC is the claims agent. BERTUCCI'S RESTAURANTS: Exclusivity Period Extended to April 10 --------------------------------------------------------------- Judge Grace E. Robson of the U.S. Bankruptcy Court for the Middle District of Florida extended Bertucci's Restaurants, LLC's exclusive period to file a plan and to solicit acceptances thereof to April 10, 2023 and June 9, 2023, respectively. About Bertucci's Restaurants, LLC Bertucci's Restaurants, LLC is a Florida limited liability company that was formed in May 2018. The Company owns and operates approximately 47 Italian-themed restaurants under the name Bertucci's Brick Oven Pizza & Pasta. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-04313) on December 5, 2022. In the petition signed by Jeffrey C. Sirolly, its secretary, the Debtor disclosed up to $50,000 in assets and up to $100 million in liabilities. Judge Grace E. Robson oversees the case. R. Scott Schuker, Esq., at Shuker and Dorris, P.A., is the Debtor's legal counsel. BLOCKFI INC: Exclusivity Period Extended to May 15 -------------------------------------------------- Judge Michael B. Kaplan of the U.S. Bankruptcy Court for the District of New Jersey extended BlockFi Inc. and its affiliates' exclusive periods to file a chapter 11 plan and solicit acceptancese thereof to May 15, 2023 and August 11, 2023, respectively. The judge determined that the legal and factual bases set forth in the Debtors' Motion establish just cause for the relief granted. BlockFi Inc. is represented by: Michael D. Sirota, Esq. Warren A. Usatine, Esq. COLE SCHOTZ P.C. Court Plaza North, 25 Main Street Hackensack, NJ 07601 Tel: (201) 489-3000 Email: msirota@coleschotz.com wusatine@coleschotz.com - and - Joshua A. Sussberg, Esq. Christine A. Okike, Esq. KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 601 Lexington Avenue New York, NY 10022 Tel: (212) 446-4800 Email: jsussberg@kirkland.com christine.okike@kirkland.com - and - Richard S. Kanowitz, Esq. Kenric D. Kattner, Esq. HAYNES AND BOONE, LLP 30 Rockefeller Plaza, 26th Floor New York, NY 10112 Tel: (212) 659-7300 Email: richard.kanowitz@haynesboone.com kenric.kattner@haynesboone.com 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. BONA VISTA 1606: Exclusivity Period Extended to June 20 ------------------------------------------------------- Judge Robert A. Mark of the U.S. Bankruptcy Court for the Southern District of Florida extended Bona Vista 1606 LLC's exclusivity periods for filing a chapter 11 plan and disclosure statement and for soliciting acceptances thereof to June 20, 2023 and August 21, 2023, respectively. Bona Vista 1606 LLC is represented by: Joel M. Aresty, Esq. JOEL M. ARESTY, P.A. 309 1st Ave S Tierra Verde, FL 33715 Phone: (305) 904-1903 Email: aresty@mac.com About Bona Vista 1606 Bona Vista 1606, LLC filed a Chapter 11 bankruptcy petition (Bankr. S.D. Fla. Case No. 22-16461) on Aug. 22, 2022, with up to $1 million in both assets and liabilities. Judge Robert A. Mark oversees the case. The Debtor is represented by Joel M. Aresty, P.A. BOY SCOUTS: Exits Chapter 11 Bankruptcy, To Compensate Survivors ---------------------------------------------------------------- On April 19, 2023, the Boy Scouts of America (BSA) emerged from Chapter 11 bankruptcy and fulfills a commitment it made when it commenced its restructuring process in February 2020: to equitably compensate survivors and preserve the mission of Scouting. The court-approved Plan of Reorganization will establish a Victims Compensation Trust that is currently valued at $2.4 billion with the opportunity for additional contributions by numerous other parties, including the BSA's insurers that have not yet settled. "This is a significant milestone for the BSA as we emerge from a three-year financial restructuring process with a global resolution approved with overwhelming support of more than 85% of the survivors involved in the case," said Roger Mosby, Chief Scout Executive, President and Chief Executive Officer. "Our hope is that our Plan of Reorganization will bring some measure of peace to survivors of past abuse in Scouting, whose bravery, patience and willingness to share their experiences has moved us beyond words." The BSA's Appreciation for Survivors The perspective and priorities of survivors will be forever ingrained in the BSA's programming moving forward through new youth safety measures, places of recognition at its High Adventure bases across the United States and a special pathway to Eagle Scout for those whose journey was interrupted during their time in Scouting. While the BSA understands that nothing it does as an organization will undo the pain survivors have endured, the organization will continue listening to them, evaluating its youth protection procedures, and working every day to make a positive impact on young people and communities across the country. The BSA is confident that the addition of a dedicated Board seat for a survivor will also help ensure the organization is honoring and learning from the perspective of those who experienced the unthinkable. Our full message of support for survivors can be viewed on our website: bsarestructing.org. The BSA's Commitment to Youth Safety Today, Scouting is safer than ever before. Importantly, the BSA is aware safety is not a static issue and is always looking for ways to improve its youth protection program to ensure it is utilizing the most up to date policies and procedures to protect children. Currently, the BSA's multi-layered safeguards include the following measures, all of which act as barriers to abuse: -- Extensive, mandatory youth protection training for all volunteers and employees; -- Partnership with the Barbara Sinatra Children's Center Foundation to educate and empower youth through the new "Protect Yourself Rules" videos to educate children to understand and recognize abuse while empowering them to get help any time they are made to feel uncomfortable; -- A leadership policy that requires at least two youth-protection trained adults be present with youth at all times during Scouting activities and bans one-on-one situations where adults would have any interaction alone with children – either in person, online, or via phone or text; -- A BSA team dedicated to addressing concerns raised about any individual in Scouting; -- A thorough screening process for new adult leaders and staff including criminal background checks; and -- The prompt mandatory reporting of any allegation or suspicion of abuse to law enforcement. The BSA supports universal measures to keep kids safe and continue to advocate for the creation of a national database to which all youth-serving organizations could contribute and use to screen volunteers. The BSA also offers a 24/7 Scouts First Helpline (1-844-SCOUTS1) and email contact address (scouts1st@scouting.org) for help reporting suspected abuse or inappropriate behavior. For more information about the BSA's youth protection policies, please visit Scouting.org/YouthSafety. The Future of Scouting Looking ahead, with safety as its top priority, the BSA is hopeful for its bright future of delivering timeless values and meaningful experiences that unite communities, bring families together, and help young people become the very best versions of themselves. "We firmly believe that Scouting is needed now more than ever, and we are dedicated to providing character development and values-based leadership training to youth across the country," said Mosby. The BSA's programming is constantly evolving to best match the priorities of today's youth and families. From the introduction of STEM-focused programs to the implementation of flexible new family-based learning opportunities, the BSA can and must continue to transform alongside the interests, experiences, and priorities of current and future generations. The organization is committed to bringing the benefits of Scouting to the greatest number of youth possible – all while remaining true to its mission and core values, providing a framework of integrity, citizenship, and character development. About Boy Scouts of America The Boy Scouts of America -- https://www.scouting.org/ -- is a federally chartered non-profit corporation under title 36 of the United States Code. Founded in 1910 and chartered by an act of Congress in 1916, the BSA's mission is to train youth in responsible citizenship, character development, and self-reliance through participation in a wide range of outdoor activities, educational programs, and, at older age levels, career-oriented programs in partnership with community organizations. Its national headquarters is located in Irving, Texas. The Boy Scouts of America and affiliate Delaware BSA, LLC, sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10343) on Feb. 18, 2020, to deal with sexual abuse claims. Boy Scouts of America was estimated to have $1 billion to $10 billion in assets and at least $500 million in liabilities as of the bankruptcy filing. The Debtors have tapped Sidley Austin LLP as their bankruptcy counsel, Morris, Nichols, Arsht & Tunnell LLP as Delaware counsel, and Alvarez & Marsal North America, LLC, as financial advisor. Omni Agent Solutions is the claims agent. The U.S. Trustee for Region 3 appointed a tort claimants' committee and an unsecured creditors' committee on March 5, 2020. The tort claimants' committee is represented by Pachulski Stang Ziehl & Jones, LLP, while the unsecured creditors' committee is represented by Kramer Levin Naftalis & Frankel, LLP. CAN B CORP: Incurs $14.9 Million Net Loss in 2022 ------------------------------------------------- Can B Corp. has filed with the Securities and Exchange Commission its Annual Report on Form 10-K disclosing a net loss of $14.92 million on $6.68 million of total revenues for the year ended Dec. 31, 2022, compared to a net loss of $12.17 million on $4.60 million of total revenues for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $15.56 million in total assets, $12.86 million in total liabilities, and $2.70 million in total stockholders' equity. Lakewood, CO-based BF Borgers CPA PC, the Company's auditor since 2021, issued a "going concern" qualification in its report dated April 17, 2023, citing that the Company's significant operating losses raise substantial doubt about its ability to continue as a going concern. A full-text copy of the Form 10-K is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/0001509957/000149315223012511/form10-k.htm About Can B Corp Headquartered in Hicksville New York, Canbiola, Inc. (now known as Can B Corp) -- http://www.canbiola.com-- develops, manufactures and sells products containing cannabinoids derived from hemp biomass and the licensing of durable medical devises. CARROLL COUNTY ENERGY: S&P Affirms 'BB-' Sr. Secured Debt Rating ---------------------------------------------------------------- S&P Global Ratings affirmed its 'BB-' rating on Carroll County Energy LLC's (CCE) senior secured term loan B (TLB) and revolving credit facility (RCF). The '2' recovery rating on the debt is unchanged, indicating S&P's expectation for substantial (70%-90%; rounded estimate: 75%) recovery in a default scenario. S&P said, "The stable outlook reflects our expectation of high levels of availability and dispatch, as well as spark spreads of $13/megawatt-hour (MWh) to $15/MWh over the next few years. Based on these assumptions, we project debt repayment (excluding mandatory amortization) of at least $12 million this year and a minimum debt service coverage ratio (DSCR) of at least 1.36x over the asset life." CCE is a 700-megawatt (MW) combined-cycle natural gas-fired power plant. The project is in Carroll County, Ohio, and dispatches into the American Electric Power (AEP) zone of the PJM Interconnection. The project is owned by AP-BCPG CCE Partners LLC (18%), San Jacinto Carroll Holdings LLC (11.5%), 730 Carroll LLC (40%), Jera Power U.S.A. Inc. (20%), and Ullico Infrastructure Carroll County HoldCo LLC (10.5%). CCE is a highly efficient combined-cycle facility that operates with a heat rate of 6,900 Btu per kilowatt hour (Btu/kWh)-7,200 Btu/kWh. This enables the project to maintain its competitive delivery cost position in the dispatch curve, and consequently high capacity factors. The project has favorable access to natural gas due to its location near the Utica and Marcellus shale plays. As a merchant generator, the project is exposed to volatile power and capacity prices in the PJM Interconnection. The single-asset nature of the project results in limited scale, scope, and geographic diversity, which concentrates the risk from unexpected operational outages. Although not an immediate risk, the project is exposed to refinancing risk. Under our current forecast, S&P projects a residual TLB balance of about $345 million at maturity in February 2026. CCE's performance has been largely in line with S&P's expectations. CCE has been operating since 2018 and has a track record of stable operational performance with high availability and capacity factors. Because of the project's highly efficient nature, its advantageous location in the Marcellus and Utica shale region, and its position on the Tennessee Gas Pipeline with its access to low-cost natural gas, CCE operates as a baseload facility with high levels of dispatch and capacity factors. The capacity factor was about 85% for 2022 and 93% as of first-quarter 2023. Financial performance is also highly dependent on the project's operational performance, which has been reliable during its operating history. For the past three years, the facility's forced outage rate has been below 2%, availability factors were 90%-95%, and the heat rate was steady at about 7,000 Btu/kWh. In addition, CCE performed well during the storm over the weekend of Dec. 23–26, 2022, as it was able to generate above its committed UCAP. The project expects about $5 million in net positive revenue for that weekend period. Given these bonus payments would be considered revenue, they would flow through the cash waterfall and could translate into higher sweeps. S&P said, "We expect the project's DSCR will remain robust in the short-to-medium term, benefiting from higher dispatch. The project swept about $15 million in 2022, exceeding our expectation of TLB repayment of $11 million, spurred by an increase in realized energy margins. Based on our assumptions for the facility's dispatch strength and energy margins, we expect the project will maintain DSCRs in the 1.8x-2.0x range through the remaining TLB term (2023-2025). We assume CCE will fully repay its debt by 2043 and forecast a minimum DSCR of 1.36x between 2026 and 2043. At the same time, we view CCE's projected financial performance as being sensitive to our modeling assumptions, particularly, long-term capacity prices and interest rates. For example, we project DSCRs pre-refinancing will be above 1.5x on a sustained basis. We also believe a material rebound in projected capacity prices or a sustained increase in spark spreads would be positive for CCE's sweep profile. "CCE's hedging in previous years at lower spark spreads should negatively affect projected energy margin for 2023. We anticipate that CCE's energy margin contribution in the near term will be affected somewhat negatively by the project's outstanding hedges for 2023, which were set when power prices were weaker. As part of its risk management practices, CCE has implemented a series of hedges for about half of its plant's capacity, due for delivery in 2023, at lower spark spreads. We anticipate that the hedges will likely result in some negative settlements. However, although those hedges do not result in an energy margin uplift under our base-case scenario given the currently elevated power prices, they provide downside protection in case of a significant downturn. "At the same time, the hedges are resulting in collateral requirements, which we view as being sufficiently met by CCE's lien-based collateral capacity and availability on its RCF. "The level of deleveraging over time is also one of our key credit considerations. We forecast CCE will pay down the TLB by at least $12 million using excess cash this year and about $40 million through the TLB period until December 2025. We understand that the amount of additional debt paydown through excess cash can vary because of the need to allocate cash for other uses such as working capital needs and reserve funding. However, we generally view an issuer with a TLB unfavorably if it is unable to deleverage meaningfully over the debt tenor. We will continue to monitor market developments and the portfolio's performance during the year. "The stable outlook reflects our expectation that CCE will maintain a minimum DSCR of 1.36x in the post-refinancing period (2026–2043). Based on our current view of the market, we project realized spark spreads of about $13-$15 per megawatt-hour (MWh) through 2024, with a capacity factor in the mid-to-high 80% range over the next few years. Under these assumptions, we forecast debt repayment of at least $12 million this year and about $345 million debt outstanding at maturity in February 2026." S&P could consider a negative rating action if CCE is unable to maintain DSCR above 1.35x on a sustained basis or if realized cash sweeps are far lower than our expectations. This could occur if: -- Weaker realized spark spreads, lower PJM capacity prices, or unfavorable hedge settlements for delivery year 2023 and beyond constrain liquidity; -- Unplanned outages substantially affect generation; -- Economic factors cause the power plants to dispatch materially less than S&P's base-case expectation; or -- The project's excess cash flows do not translate into expected debt paydowns, leading to higher than-expected debt balance at maturity. S&P said, "Although unlikely in the near term, we could raise the rating if we expect the project will maintain a minimum base-case DSCR greater than 1.8x in all years, including the post-refinancing period. We would expect such outcomes to materialize only via significant improvement in spark spreads and uncleared capacity prices in PJM's AEP zone." CELSIUS NETWORK: US Trustee Objects to $2.8-Mil. Exec Bonuses ------------------------------------------------------------- The U.S. Trustee's Office objected Friday, April 14, 2023, to proposed incentive bonuses for insiders of bankrupt cryptocurrency platform Celsius Network that would pay $2.86 million to senior employees. In the KEIP Motion, Debtors request authority to provide 10 insiders up to $2.86 million in bonuses. The U.S. Trustee says the KEIP is merely a "pay-to-stay" retention plan. "While the Debtors have styled the KEIP as an incentive plan, the KEIP appears to be a disguised retention plan. The tasks listed by the Debtors as a basis for Bonuses, require little more than the KEIP Participants do their jobs while the chapter 11 cases are pending and await either confirmation of the Plan currently proposed by the Debtors – for which the Debtors have already lined up a stalking horse purchaser and have proposed confirmation dates in less than three months-time – or, if that Plan fails, wait for the Debtors to complete an orderly wind-down. Further, the other proposed incentive benchmark, the requirement that a certain number of mining rigs be online and hashing by a date certain, is a benchmark which the Debtors already have met on more than one occasion during the cases. Even more egregious -- many of the tasks identified by the Debtors are verbatim the same tasks identified as the basis for the KERP Bonuses, which were approved back in December 2022," the U.S. Trustee said. About Celsius Network Celsius Network LLC -- http://www.celsius.network/-- is a financial services company that generates revenue through cryptocurrency trading, lending, and borrowing, as well as by engaging in proprietary trading. Celsius helps over a million customers worldwide to find the path towards financial independence through a compounding yield service and instant low-cost loans accessible via a web and mobile app. Celsius has a blockchain-based fee-free platform where membership provides access to curated financial services that are not available through traditional financial institutions. The Celsius Wallet claims to be one of the only online crypto wallets designed to allow members to use coins as collateral to get a loan in dollars, and in the future, to lend their crypto to earn interest on deposited coins (when they're lent out). Crypto lenders such as Celsius boomed during the COVID-19 pandemic, drawing depositors with high interest rates and easy access to loans rarely offered by traditional banks. But the lenders' business model came under scrutiny after a sharp sell-off in the crypto market spurred by the collapse of major tokens terraUSD and luna in May 2022. New Jersey-based Celsius froze withdrawals in June 2022, citing "extreme" market conditions, cutting off access to savings for individual investors and sending tremors through the crypto market. The list of major crypto firms that have filed for bankruptcy protection in 2022 now includes Celsius Network, Three Arrows Capital and Voyager Digital. Celsius Network, LLC and its subsidiaries sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 22-10964) on July 14, 2022. In the petition filed by CEO Alex Mashinsky, the Debtors estimated assets and liabilities between $1 billion and $10 billion. The Debtors tapped Kirkland & Ellis, LLP and Kirkland & Ellis International, LLP as bankrupty counsels; Fischer (FBC & Co.) as special counsel; Centerview Partners, LLC as investment banker; and Alvarez & Marsal North America, LLC as financial advisor. Stretto is the claims agent and administrative advisor. On July 27, 2022, the U.S. Trustee appointed an official committee of unsecured creditors. The committee tapped White & Case, LLP as its bankruptcy counsel; Elementus Inc. as its blockchain forensics advisor; M3 Advisory Partners, LP as its financial advisor; and Perella Weinberg Partners, LP as its investment banker. Shoba Pillay, Esq., is the examiner appointed in the Debtors' Chapter 11 cases. Jenner & Block, LLP and Huron Consulting Services, LLC serve as the examiner's legal counsel and financial advisor, respectively. CFN ENTERPRISES: Incurs $9.9 Million Net Loss in 2022 ----------------------------------------------------- CFN Enterprises Inc. has filed with the Securities and Exchange Commission its Annual Report on Form 10-K disclosing a net loss of $9.92 million on $4.32 million of net revenues for the year ended Dec. 31, 2022, compared to a net loss of $12.20 million on $3.16 million of net revenues for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $870,551 in total assets, $10.04 million in total liabilities, and a total stockholders' deficit of $9.17 million. New York, NY-based RBSM LLP, the Company's auditor since 2012, issued a "going concern" qualification in its report dated April 17, 2023, citing that the Company has suffered recurring losses from operations and will require additional capital to continue as a going concern. This raises substantial doubt about the Company’s ability to continue as a going concern. A full-text copy of the Form 10-K is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1352952/000109690623000855/cnfn-20221231.htm About CFN Enterprises Inc. CFN Enterprises Inc. owns and operates CNP Operating, a cannabidiol, or CBD, manufacturer vertically integrated with a 360 degree approach to the processing of high quality CBD products designed for growers, pharmaceutical, wellness providers, and retailers' needs, and a cannabis industry focused sponsored content and marketing business. The Company's ongoing operations currently consist primarily of CNP Operating and the CFN Business and it will continue to pursue strategic transactions and opportunities. The Company is currently in the process of launching an e-commerce network focused on the sale of general wellness CBD products. CHOBANI LLC: Moody's Affirms 'B3' CFR & Alters Outlook to Positive ------------------------------------------------------------------ Moody's Investors Service affirmed the ratings of Chobani, LLC including the B3 Corporate Family Rating, the B3-PD Probability of Default Rating, the B1 rating on the company's senior secured bank credit facility, the B1 rating on the company's senior secured notes, and the Caa2 rating on the company's senior unsecured debt. Moody's assigned a B1 rating to the senior secured revolver expiring February 2028. Moody's also changed the outlook to positive from stable. The outlook revision to positive from stable reflects the deleveraging progress over the last year as Chobani's debt/EBITDA (on a Moody's adjusted basis) has declined to 6.5x for the fiscal year ended December 31, 2022 from 7.6x as of December 25, 2021. The outlook change also reflects Moody's expectation of continued earnings growth, deleveraging, and for free cash flow to turn positive over the next 12-18 months. Deleveraging is being driven by earnings growth as the company's revenue grew 27% and EBITDA (on a Moody's adjusted basis) grew 24% in fiscal 2022. The strong earnings growth reflects benefits from pricing that was taken to mitigate the impact of higher costs. Earnings growth also reflects good volume growth across the company's portfolio, including double digit growth in its oat milk and creamer categories, and single digit growth in yogurt. The company entered the oat milk and creamer market in December 2019 and has been rapidly gaining market share, though yogurt still made up roughly 81% of Chobani's fiscal 2022 sales. Within yogurt, the company is benefiting from distribution gains and innovations. The company's profitability has also improved due to better plant productivity, reduced reliance on co-manufacturers, and the exit of non-differentiated/low margin platforms such as ultra-filtered milk. Moody's projects debt/EBITDA to decline to roughly 4.5x by the end of fiscal year ended December 2023, and to approach 4.0x by the end of fiscal 2024. Moody's projection reflects its expectation of mid-single digit sales growth over the next 12 to 18 months driven by continued double digit volume growth in oat milk and creamers, low single digit volume growth in yogurt, and modest benefit from carry over pricing. Moody's projects free cash flow to rebound from negative $43 million in fiscal 2022 to more than $50 million in both fiscal 2023 and fiscal 2024. Fiscal 2022 free cash flow was negative because of large capital investments to support growth for the company's oat milk and creamer platforms, as well as an investment in water infrastructure to support production growth at the company's Idaho facility. The company also experienced a working capital cash drag that was driven by sales growth and higher costs. Moody's expects capital expenditures to decline by roughly $30 million in fiscal 2023, with the remainder of the free cash flow improvement driven by earnings growth. Execution risk remains high though as volumes could face pressure as consumers become more cost conscious in a challenging macro environment. Competitors may also become more aggressive on pricing and promotions as supply chains normalize. Moody's assigned a B1 rating to Chobani's extended $125 million revolver expiring in February 2028. The remainder of the original $150 million revolver commitment expires in April 2024 and Moody's affirmed the B1 rating on the facility. The following ratings/assessments are affected by the action: Affirmations: Issuer: Chobani, LLC Corporate Family Rating, Affirmed B3 Probability of Default Rating, Affirmed B3-PD Backed Senior Secured Bank Credit Facilities (Revolver and Term Loan), Affirmed B1 (LGD3) Backed Senior Secured Regular Bond/Debenture, Affirmed B1 (LGD3) Backed Senior Unsecured Regular Bond/Debenture, Affirmed Caa2 (LGD5) Assignments: Issuer: Chobani, LLC Backed Senior Secured 1st Lien Revolving Credit Facility, Assigned B1 (LGD3) Outlook Actions: Issuer: Chobani, LLC Outlook, Changed To Positive From Stable RATINGS RATIONALE Chobani's B3 CFR reflects its high financial leverage and its history of weak free cash flow. The ratings also reflect high execution risk associated with Chobani's high-paced innovation strategy, which is a key component of its plan for driving sales and earnings growth, margin expansion and financial deleveraging. Chobani also has significant exposure to dairy price volatility, and high business risk due to its single brand focus and high product concentration in the mature and highly competitive yogurt category. Chobani also has high governance risks, reflecting concentrated control by the founder who also holds key senior executive roles including the CEO and chairman positions. Chobani's credit profile is supported by its leading share in the US Greek yogurt category, strong brand equity that supports the company's expansion into adjacent categories, and good growth opportunities in the company's modern food categories, including oat milk and creamers. Additionally, the company has recently made significant investments in its facilities to support these growth initiatives, which should reduce capital spending needs near term. Chobani's good liquidity reflects Moody's expectation for more than $50 million of positive free cash flow over the next 12 months. Chobani's liquidity is also supported by a cash balance of $21 million as of December 31, 2022, $145 million of availability on its $150 million revolver (net of $5 million letters of credit outstanding) and access to a $75 million trade receivables factoring facility that is renewed annually. The trade facility had $46 million outstanding as of December 31, 2022, and was last renewed on December 21, 2022. The $150 million revolver was recently amended in February 2023, with the maturity extended to February 2028 for $125 million of the commitment, with the remaining $25 million commitment expiring at the original maturity date of April 2024. The February 2028 extended maturity springs to 91 days prior to the earlier of the term loan maturity date (October 2027) and the stated maturity of the unsecured notes (April 2025). Based on the current debt maturity profile, the revolver maturity would spring from February 2028 to January 2025 if the unsecured notes maturity was not addressed by then. The revolving credit facility contains a springing maximum first lien net leverage ratio covenant of 5.5x, tested only when more than 35% of the revolver commitment is utilized on the last day of any fiscal quarter period. The company had ample cushion within the covenant test as of December 31, 2022 and Moody's doesn't expect the covenant to be tested over the next 12 months. Moody's also projects the company will maintain good covenant cushion. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The positive outlook reflects Moody's view that the company will continue to generate earnings growth to reduce debt/EBITDA leverage (on a Moody's adjusted basis). The outlook also reflects that Chobani will improve free cash flow to a meaningfully positive and sustained level by the end of fiscal 2023 following two years of negative free cash flow. A rating upgrade could occur if Chobani sustainably grows earnings supported by consistent revenue and EBITDA margin expansion, sustains debt/EBITDA below 6.0x and generates consistent positive free cash flows. A rating downgrade could occur if the company's operating results deteriorate highlighted by revenue declines or significant EBITDA margin deterioration, if debt/EBITDA is sustained above 8.0x, or if free cash flows remain negative. The ratings could also be downgraded if liquidity deteriorates for any reasons, including high reliance on the revolver facility. ESG CONSIDERATIONS ESG considerations have a highly negative credit impact (CIS-4) on Chobani's rating. The CIS score reflects the weight placed on Chobani's governance, including Moody's expectation for an aggressive financial policy including use of high leverage and concentrated voting control under the founder/CEO's majority ownership. The company is also moderately negatively exposed to environmental and social risks. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Consumer Packaged Goods published in June 2022. COMPANY PROFILE Chobani, LLC, based in New Berlin, New York, is a leading manufacturer of Greek yogurt, as well as other dairy and non-dairy milk products sold under the "Chobani" master brand. Chobani generated revenue of approximately $2.1 billion in the fiscal year ended December 31, 2022. The company is 80% owned by CEO and founder Hamdi Ulukaya and 20% owned by Healthcare Of Ontario Pension Plan (HOOPP). CINEWORLD PLC: Judge Directs Return to Talks w/ National Cinemedia ------------------------------------------------------------------ Amelia Pollard of Bloomberg Law reports that Cineworld Group Plc's months-long effort to shed a burdensome contract with its in-theater advertiser has hit a roadblock. US Bankruptcy Judge Marvin Isgur is forcing the company to hold immediate talks with its long-standing advertiser, National CineMedia, after that company filed for bankruptcy this week. The movie advertiser's future is at stake, as Cineworld’s contract comprises a large portion of its business. National CineMedia has been suing Cineworld since October 2022 over the theater chain's attempt to abandon the contract, arguing the deal’s terms don't allow such a move. The dispute is hanging over Cineworld’s plans to exit bankruptcy. About National CineMedia National CineMedia, LLC, based in Centennial, Colo., owns the largest cinema-advertising network in North America. NCM derives its revenue principally from the sale of advertising to national, regional, and local businesses, which is displayed on a national and regional digital network of movie theaters. National CineMedia, LLC, filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 23-90291) on April 11, 2023, listing $500 million to $1 billion in estimated assets; and $1 billion to $10 billion in estimated liabilities. The petition was signed by Ronnie Ng, chief financial officer of National CineMedia, Inc. The Hon. David R. Jones presides over the case. Paul, Weiss, Rifkind, Wharton & Garrison LLP, led by Paul M. Basta, Esq., Kyle J. Kimpler, Esq., Sarah Harnett, Esq., and Shafaq Hasan, Esq., serves as counsel to the Debtor. John F. Higgins, Esq., at Porter Hedges LLP, serves as the Debtor's local counsel. The Debtor tapped Latham & Watkins LLP as special corporate & litigation counsel; Lazard Freres & Co., as investment banker; FTI Consulting, Inc., as restructuring advisor; and Omni Agent Solutions as notice, claims and balloting agent. About Cineworld Group London-based Cineworld Group PLC was founded in 1995 and is the world's second-largest cinema chain. Cineworld operates 751 sites with 9,000 screens in 10 countries, including the Cineworld and Picturehouse screens in the UK and Ireland, Yes Planet in Israel, and Regal Cinemas in the United States. According to The Guardian, the Griedinger family, including Mooky's brother and deputy chief executive, Israel, have struggled to maintain control of the ailing business but have been forced to reduce their stake from 28% in recent years. Cineworld's top five investors include the Chinese Jangho Group at 13.8%, Polaris Capital Management (7.82%), Aberdeen Standard Investments (4.98%) and Aviva Investors (4.88%). The London-listed Cineworld, which has run up debt of more than $4.8 billion after losses soared during the pandemic, is pinning its hopes on a meatier slate of movies in 2022 to bounce back from a two-year lull. Cineworld Group plc and 104 affiliates sought Chapter 11 protection (Bankr. S.D. Texas Lead Case No. 22-90168) on Sept. 7, 2022, estimating more than $1 billion in assets and debt. Judge Marvin Isgur oversees the cases. The Debtors tapped Kirkland & Ellis, LLP and Jackson Walker, LLP as bankruptcy counsels; PJT Partners, LP as investment banker; AlixPartners, LLP as restructuring advisor; and Ernst & Young, LLP as tax services provider. Kroll Restructuring Administration, LLC is the claims agent. The U.S. Trustee for Region 7 appointed an official committee of unsecured creditors in the Debtors' Chapter 11 cases on Sept. 23, 2022. The committee tapped Weil, Gotshal & Manges, LLP and Pachulski Stang Ziehl & Jones, LLP as legal counsels; FTI Consulting, Inc., as financial advisor; and Perella Weinberg Partners, LP, as investment banker. CIRTRAN CORP: Swings to $1.5 Million Net Loss in 2022 ----------------------------------------------------- CirTran Corporation has filed with the Securities and Exchange Commission its Annual Report on Form 10-K disclosing a net loss of $1.50 million on $1.72 million of net sales for the year ended Dec. 31, 2022, compared to net income of $126,212 on $2.92 million of net sales for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $2 million in total assets, $44.06 million in total liabilities, and a total stockholders' deficit of $42.07 million. Spokane, Washington-based Fruci & Associates II, PLLC, the Company's auditor since 2020, issued a "going concern" qualification in its report dated April 17, 2023, citing that the Company has a working capital deficiency, a net loss from continuing operations, and an accumulated deficit. These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern. A full-text copy of the Form 10-K is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/0000813716/000149315223012637/form10-k.htm About Cirtran Corp West Valley City, Utah-based CirTran Corporation is an established global company with a diversified expertise in manufacturing, marketing, distribution and technology in a wide variety of consumer products, including tobacco products, medical devices and beverages. CLARIOS GLOBAL: Fitch Rates New $500MM Secured Notes Due 2028 'B+' ------------------------------------------------------------------ Fitch Ratings has assigned a 'B+'/'RR3' rating to Clarios Global LP's (Clarios) proposed issuance of $500 million of senior secured notes due 2028. Clarios' Long-Term Issuer Default Rating (IDR) is 'B' and its Rating Outlook is Stable. Clarios' ratings reflect its strong business profile, solid profitability and consistent FCF, balanced against high leverage. Its vehicle batteries are non-discretionary, and about 80% of its revenue is derived from the less-cyclical, higher-margin replacement channel. Leverage remains high, but it has declined from its peak in fiscal 2020. KEY RATING DRIVERS Proposed Notes: Proceeds from the proposed notes will be used to repay a portion of the outstanding borrowings on Clarios' existing term loan B facility, making the transaction leverage-neutral. The proposed notes will have the same collateral as the company's existing first-lien secured debt. Advanced Battery Growth: Sales of higher-margin advanced batteries have accelerated over the past few years. Although many of these batteries are currently going into the original equipment (OE) channel, they are increasing as a proportion of Clarios' aftermarket sales as vehicles' batteries are replaced. Sales of advanced batteries in the aftermarket channel were up 11% in fiscal 2022, and they constituted 18% of Clarios' aftermarket sales in fiscal 1Q23. Fitch expects this mix shift to continue, which will drive growth in profitability over the next several years. Solid FCF: Fitch expects Clarios to generate solid FCF over the next several years on resilient end-market conditions in the global aftermarket channel, growth in the OE channel, positive mix shifts toward increased sales of advanced batteries and cost benefits from restructuring. However, the company's near-term FCF margin will likely be held back somewhat by inflationary pressures and higher capex. Fitch expects Clarios' FCF margins (according to Fitch's methodology) to increase toward 5% or higher over the next couple of years. Clarios' actual FCF margin was 1.5% in fiscal 2022. Capex as a percentage of revenue in fiscal 2022 was 3.2%, up from 2.6% in fiscal 2021 but down from the 4%-4.5% range in fiscal 2019 and 2020. Looking ahead, Fitch expects capex as a percentage of revenue to run in the 3%-4% range over the intermediate term, with capex running at the higher end of that range over the next couple of years. High Leverage: Clarios made progress on reducing debt in fiscal 2022, and Fitch expects the company will continue to look for opportunities to further reduce debt over the next several years. However, Fitch expects the company's debt and leverage to remain relatively high over the intermediate term. That said, the company has a substantial amount of prepayable term loan debt outstanding, and its senior notes became callable in May 2022, providing the company with several options to use excess cash for further debt reduction. Fitch expects EBITDA leverage (total debt, including off-balance sheet factoring/EBITDA, based on Fitch's calculations) to decline toward 6.0x over the next couple of years, assuming no accelerated debt prepayments. Actual EBITDA leverage at fiscal YE 2022 was 6.6x, down from 6.8x at fiscal YE 2021. DERIVATION SUMMARY Clarios has a very strong competitive position as the largest low-voltage vehicle battery manufacturer in the world, with the company responsible for about one-third of the industry's total production. Although the company counts many global OE manufacturers as customers, roughly 80% of its sales are derived from the global vehicle aftermarket. As vehicle batteries are a non-discretionary replacement item, Clarios' strong aftermarket presence provides it with a more stable revenue stream through the cycle than auto suppliers that are predominantly tied to new vehicle production, such as BorgWarner Inc. (BBB+/Stable) or Aptiv PLC (BBB/Stable). The company's heavy aftermarket weighting makes it more comparable to global tire manufacturers, such as Compagnie Generale des Etablissements Michelin (A-/Stable) and The Goodyear Tire & Rubber Company (BB-/Stable) or other suppliers with a significant aftermarket concentration, such as First Brands Group LLC (BB-/Stable) or Tenneco Inc. (B/Stable). Clarios' margins are strong for an auto supplier, with forecasted EBITDA margins (according to Fitch's methodology) running in the high teens over the next several years, which is in line with some investment-grade auto suppliers, such as BorgWarner or Aptiv, while forecasted FCF margins in the low- to mid-single-digit range are also consistent with investment-grade auto suppliers. However, leverage is high and consistent with auto suppliers in the 'B' rating category. Over the longer term, Fitch expects Clarios' leverage will decline due to increased EBITDA resulting from sales growth tied to the rising global vehicle population and a richer mix of advanced absorbent glass mat (AGM) and enhanced flooded (EFB) batteries. Fitch also expects the company will continue to seek opportunities to reduce debt, which would further accelerate leverage reduction. Fitch rates the IDRs of Clarios and its Clarios International Inc. parent on a consolidated basis, using the weak parent/strong subsidiary approach and open access and control factors, as discussed in Fitch's "Parent and Subsidiary Linkage Rating Criteria". This is based on the entities operating as a single enterprise with strong legal and operational ties. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer - Global battery demand rises in the low- to mid-single-digit range annually over the intermediate term; - In addition to volume growth, revenue is supported over the next several years by mix shifting to higher-priced absorbent glass mat and enhanced flooded batteries, as well as modest price increases on traditional batteries; - Margins in the near term are compressed a bit by inflationary pressures. Over the longer term, margins improve as a result of operating leverage on higher production levels, positive pricing and mix, and savings associated with cost reduction initiatives; - Capex as a percentage of revenue runs in the 2.5% to 3.5% range, which is a little lower than pre-pandemic levels; - Excess cash over the next several years is primarily used to reduce debt or fund limited M&A activity; - Fitch has not incorporated the effect of any potential IPO into its forecasts. KEY RECOVERY RATING ASSUMPTIONS The recovery analysis assumes Clarios would be considered a going concern in bankruptcy and would be reorganized rather than liquidated. Fitch has assumed a 10% administrative claim in the recovery analysis. Clarios' recovery analysis reflects a potential severe downturn in vehicle battery demand and estimates the going-concern EBITDA at $1.4 billion, which reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which the valuation of the company would be based following a hypothetical default. The sustainable, post-reorganization EBITDA is for analytical valuation purposes only and does not reflect a level of EBITDA at which Fitch believes the company would fall into distress. The going-concern EBITDA considers Clarios' stable operations, high operating margins, significant percentage of aftermarket revenue and the non-discretionary nature of its products. The $1.4 billion ongoing EBITDA assumption is 16% lower than Fitch's calculated actual EBITDA of $1.7 billion for the LTM period ended Dec. 31, 2022. Fitch utilizes a 6.0x enterprise value (EV) multiple based on Claros' strong global market position and the non-discretionary nature of the company's batteries. In addition, Brookfield's acquisition of Clarios valued the company at an EV over 8.0x (excluding expected post-acquisition cost savings). All of Clarios' rated debt is guaranteed by certain foreign and domestic subsidiaries. According to the "Automotive Bankruptcy Enterprise Values and Creditor Recoveries" report published by Fitch in January 2022, 52% of auto-related defaulters had exit multiples above 5.0x, with 30% in the 5.0x to 7.0x range. However, the median multiple observed across 23 bankruptcies was only 5.1x. Within the report, Fitch observed that 87% of the bankruptcy cases analyzed were resolved as a going concern. Automotive defaulters were typically weighed down by capital structures that became untenable during a period of severe demand weakness, either due to economic cyclicality or the loss of a significant customer, or they were subject to significant operational issues. While Clarios has a highly leveraged capital structure, Fitch believes the company's business profile is stronger than most of the issuers included in the automotive bankruptcy observations. Consistent with Fitch's criteria, the recovery analysis assumes that off-balance-sheet factoring is replaced with a super-senior facility that has the highest priority in the distribution of value. Fitch also assumes a nearly full draw on the ABL revolver. The ABL receives second priority in the distribution of value after the factoring. Due to the ABL's first-lien claim on ring-fenced collateral, the facility receives a Recovery Rating of 'RR1' with a waterfall generated recovery computation (WGRC) in the 91%-100% range. The analysis also assumes a full draw on the cash flow revolver. Including this, the first lien secured debt receives a lower priority than the ABL in the distribution of value hierarchy, in part due to its second lien claim on the ABL's collateral. This results in a Recovery Rating of 'RR3' with a WGRC in the 51%-70% range. The senior unsecured notes has the lowest priority in the distribution of value. This results in a Recovery Rating of 'RR6' with a WGRC in the 0%-10% range, owing to the significant amount of secured debt positioned above it in the distribution waterfall. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Financial policy-driven debt reduction that leads to sustained gross EBITDA leverage of 5.5x; - Sustained FCF margin of 2.5%; - Sustained Fitch-calculated EBITDA margins in the low-teens. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Sustained gross EBITDA leverage above 7.0x without a clear path to de-levering; - Sustained FCF margins near 1.0%; - A sustained decline in the Fitch-calculated EBITDA margin below 10%. LIQUIDITY AND DEBT STRUCTURE Solid Liquidity: Fitch expects Clarios' liquidity to remain sufficient for its operating and investing needs over the intermediate term. Liquidity at Dec. 31, 2022 included $236 million of cash and cash equivalents, augmented by significant revolver capacity. Following March 2023 amendments, revolver capacity includes both an $800 million ABL facility and an $800 million first lien secured cash flow revolver. As of Dec. 31, 2022, Clarios had full availability on the cash flow revolver and $100 million of borrowings and $62 million of letters of credit on the ABL facility. Debt obligations (excluding Fitch's factoring adjustments) are light over the next several years. The next significant debt obligation is not until 2025, when the remaining $450 million of the company's 6.75% senior secured notes matures. Fitch expects Clarios' FCF to generally be sufficient to cover its seasonal cash needs. As a result, based on its criteria, Fitch has treated all of Clarios' cash as readily available. Debt Structure: As of Dec. 31, 2022, Clarios had about $10.8 billion of debt outstanding, including Fitch's estimate for off-balance-sheet factoring. This consisted of $7.6 billion of first-lien secured debt, comprising U.S. dollar- and euro-denominated term loans, secured notes and ABL borrowings, as well as $1.7 billion of senior unsecured notes. The remaining debt largely consisted of $6 million of debt related to the acquisition of a variable interest entity and the estimated off-balance sheet factoring. Fitch excludes finance leases from its debt calculations. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. ISSUER PROFILE Clarios is the largest manufacturer and distributor of low voltage, advanced automotive batteries in the world. The company provides one in every three automotive lead-acid batteries globally, servicing cars, heavy duty trucks, motorcycles, marine and power sports vehicles in both the OE and aftermarket channels. Entity/Debt Rating Recovery ----------- ------ -------- Clarios Global LP senior secured LT B+ New Rating RR3 CLEAN ENERGY: Posts $147K Net Profit in 2022 -------------------------------------------- Clean Energy Technologies, Inc. has filed with the Securities and Exchange Commission its Annual Report on Form 10-K disclosing net profit of $147,395 on $2.66 million of sales for the year ended Dec. 31, 2022, compared to net profit of $278,492 on $1.30 million of sales for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $8.11 million in total assets, $6.24 million in total liabilities, and $1.88 million in total stockholders' equity. Spokane, Washington-based Fruci & Associates II, PLLC, the Company's auditor since 2015, issued a "going concern" qualification in its report dated April 17, 2023, citing that the Company has an accumulated deficit, a working capital deficit and negative cash flows from operations. These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern. A full-text copy of the Form 10-K is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1329606/000149315223012437/form10-k.htm About Clean Energy Headquartered in Costa Mesa, California, Clean Energy Technologies, Inc. -- http://www.cetyinc.com-- designs, produces and markets clean energy products and integrated solutions focused on energy efficiency and renewables. The Company provides waste heat recovery solutions, waste to energy solutions, and engineering, consulting and project management solutions. CORE SCIENTIFIC: Names Adam Sullivan as President Amid Bankruptcy ----------------------------------------------------------------- ForKast reports that bankrupt cryptocurrency miner Core Scientific Inc. has appointed Adam Sullivan, an investment banking veteran, as its new president, the company said in a court filing dated Monday, April 10, 2023. Sullivan, whose most recent role was managing director of XMS Capital Partners, where he oversaw over US$5 billion of transactions. He also represented the Power and Digital Infrastructure Acquisition Corporation in its acquisition of Core Scientific Holding Company in 2021, the company said. Sullivan will report to Mike Levitt, chief executive officer of Core Scientific, and will work on financial and strategic matters while assisting with the negotiation of a reorganization plan, according to the filing. Core Scientific’s current president, Todd DuChene, will continue serving as chief legal officer and will take on a new role as chief administrative officer. In December, the Texas-based miner filed for Chapter 11 bankruptcy protection amid falling crypto prices and rising energy costs. The company added that it will continue to operating its existing self-mining and hosting operations, which has remained "significantly cash flow positive on a debt-free basis." The company is expected to bring Sullivan on board 15 days after the bankruptcy court approved the employment motion, the filing showed. 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. COSMOS GROUP: Widens Net Loss to $104.1 Million in 2022 ------------------------------------------------------- Cosmos Group Holdings Inc. has filed with the Securities and Exchange Commission its Annual Report on Form 10-K disclosing a net loss of $104.13 million on $6.14 million of net interest income for the year ended Dec. 31, 2022, compared to a net loss of $25.15 million on $5.68 million of net interest income for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $36.68 million in total assets, $32.72 million in total liabilities, and $3.96 million in stockholders' equity. Cosmos Group said, "With respect to the ongoing and evolving coronavirus (COVID-19) outbreak, which was designated as a pandemic by the World Health Organization on March 11, 2021, the outbreak has caused substantial disruption in international economies and global trades and if repercussions of the outbreak are prolonged, could have a significant adverse impact on the Company's business. "The continuation of the Company as a going concern in the next twelve months is dependent upon the continued financial support from its stockholders. Management believes the Company is currently pursuing additional financing for its operations. However, there is no assurance that the Company will be successful in securing sufficient funds to sustain the operations. "These and other factors raise substantial doubt about the Company's ability to continue as a going concern. "We require additional funding to meet its ongoing obligations and to fund anticipated operating losses. Our auditor has expressed substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent on raising capital to fund its initial business plan and ultimately to attain profitable operations. These consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets and liabilities that may result in the Company not being able to continue as a going concern. "We expect to incur marketing and professional and administrative expenses as well expenses associated with maintaining our filings with the Commission. We will require additional funds during this time and will seek to raise the necessary additional capital. If we are unable to obtain additional financing, we may be required to reduce the scope of our business development activities, which could harm our business plans, financial condition and operating results. Additional funding may not be available on favorable terms, if at all. We intend to continue to fund its business by way of equity or debt financing and advances from related parties. Any inability to raise capital as needed would have a material adverse effect on our business, financial condition and results of operations. "If we cannot raise additional funds, we will have to cease business operations. As a result, our common stock investors might lose all of their investment." A full-text copy of the Form 10-K is available for free at: https://www.sec.gov/Archives/edgar/data/1706509/000121390023030219/f10k2022_cosmosgr.htm About Cosmos Group Headquartered in Singapore, Cosmos Group is a Nevada holding company with operations conducted through its subsidiaries based in Singapore and Hong Kong. The Company, through its subsidiaries, is engaged in two business segments: (i) the physical arts and collectibles business, and (ii) the financing/money lending business. The Company currently does not have any customers that are from the United States or any U.S. person nor is the Company specifically targeting customers from the United States. However, the Company's operation of an online market place for collectibles and fine art is accessible online by interested parties and may potentially be accessed by users located in the United States. DAVID'S BRIDAL: April 24 Deadline Set for Panel Questionnaires -------------------------------------------------------------- The United States Trustee is soliciting members for committee of unsecured creditors in the bankruptcy case of David's Bridal LLC. If a party wishes to be considered for membership on any official committee that is appointed, it must complete a questionnaire available at https://bit.ly/440jtWK and return by email it to Tina L. Oppelt [Tina.L.Oppelt@usdoj.gov] at the Office of the United States Trustee so that it is received no later than 1:00 p.m., on April 24, 2023. If the U.S. Trustee receives sufficient creditor interest in the solicitation, it may schedule a meeting or telephone conference for the purpose of forming a committee. About David's Bridal David's Bridal, based in Conshohocken, Pa., and its affiliated entities are international bridal and special occasion retailers. They sell a broad assortment of bridal gowns, bridesmaid dresses, special occasion dresses and accessories. As of April 17, 2023, David's Bridal operates 294 stores across the United States, Canada, and United Kingdom and franchise eight stores in Mexico. David's Bridal, LLC, f/k/a David's Bridal, Inc., and five affiliates sought Chapter 11 bankruptcy protection (Bankr. D.N.J. Case No. 23-13131) on April 16, 2023. The Hon. Christine M. Gravelle presides over the Debtors' cases. Joshua A. Sussberg, P.C., Christopher T. Greco, P.C., Rachael M. Bentley, Esq., and Alexandra Schwarzman, P.C., at Kirkland & Ellis LLP; and Michael D. Sirota, Esq., Felice R. Yudkin, Esq., and Rebecca W. Hollander, Esq., at Cole Schotz P.C., serve as counsel to the Debtors. The Debtors' financial advisor is Berkeley Research Group, LLC; investment banker is Houlihan Lokey Capital, Inc.; liquidation consultant is Gordon Brothers Retail Partners, LLC; and claims and noticing agent is Omni Agent Solutions. The Debtors listed $100 million to $500 million in both estimated assets and estimated liabilities. The petitions were signed by James Marcum as chief executive officer. Previously, with over 300 stores, David's Bridal, Inc., and its three affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 18-12635) on Nov. 19, 2018. The Hon. Laurie Selber Silverstein was the case judge. Debevoise & Plimpton LLP served as the Company's legal advisor, Evercore LLC was the financial advisor and AlixPartners LLP was the restructuring advisor. In January 2019, David's Bridal successfully emerged from Chapter 11 bankruptcy and completed its financial restructuring. DAVID'S BRIDAL: To Cut 9,000+ Workers Ahead of Potential Sale ------------------------------------------------------------- Lizzy McLellan Ravitch of The Philadelphia Inquirer reports that David's Bridal is laying off more than 9,000 workers, including many in the Philadelphia region, and the company may be sold. The Conshohocken-based wedding gown chain said in a notice to the Pennsylvania Department of Labor and Industry that it would be laying off 9,236 people across the United States. A specific number for Pennsylvania was not available as of Friday. "We are evaluating our strategic options and a sale process is underway. At this time, there are no updates to share," spokesperson Laura McKeever said. Across the state, 15 locations will be affected, including six stores in the Philadelphia suburbs, the notice said. A company spokesperson did not respond to questions on Friday about whether those stores would remain open. The first round of layoffs occurred on Thursday, and two more phases will take place in May and June. While exact employee count companywide is unclear, it appeared to be around 11,000 in recent years. The New York Times earlier reported that the company was considering filing for bankruptcy protection for the second time in five years, suggesting that wedding-related merchandise sales haven’t recovered from the COVID-19 pandemic, even as people return to throwing big events. At the time, McKeever said the company would not comment on speculation. David's Bridal just emerged from Chapter 11 bankruptcy in early 2019. The company celebrated its 70th anniversary in 2020. It has over 300 stores, mostly in the U.S. with a few in Mexico and Canada. "As ever, providing excellent service remains our focus and we are committed to serving and delivering for our brides and customers and being part of magical moments," McKeever added. Is David's Bridal going out of business? No signs point toward David's Bridal going out of business and it's too early to tell whether a company sale will result in store closures. When David’s Bridal filed for bankruptcy in 2018 the company said it would keep stores open and continue to serve customers. Leadership reported that it had done so when the company emerged from bankruptcy in 2019. About David's Bridal David's Bridal -- http://www.davidsbridal.com/-- is an international bridal retailer and the largest U.S. destination for bridal gowns, wedding-related apparel, social occasion apparel, accessories and services. For over 60 years, the Company has remained the most iconic bridal destination, with approximately one-third of brides in the United States wearing a David's Bridal gown. Then with over 300 stores, David's Bridal, Inc., and its three affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 18-12635) on Nov. 19, 2018. The Honorable Laurie Selber Silverstein was the case judge. Debevoise & Plimpton LLP served as the Company's legal advisor, Evercore LLC was the financial advisor and AlixPartners LLP was the restructuring advisor. In January 2019, David's Bridal successfully emerged from Chapter 11 bankruptcy and completed its financial restructuring. DEVILLE CORP: Seeks to Extend Plan Exclusivity ---------------------------------------------- Deville Corp. asks the U.S. Bankruptcy Court for the Middle District of Florida to extend its exclusive periods to file a plan of reorganization and to solicit acceptances thereof to a date that is 30 days and 60 days, respectively, after the conclusion of the trial on the motions to dismiss. Unless extended, the Debtor's exclusive period to file a plan and to solicit acceptances thereof would expire on April 14, 2023 and June 12, 2023, respectively. The Debtor stated that the various parties in the case, including both the Debtor, the Debtor's shareholders including Savannah Capital, LLC, and the Ad Hoc Committee of Equity Holders of Savannah Capital are engaged in an ongoing court-ordered mediation, and negotiations surrounding potential resolutions of the case are continuing. The Debtor also stated that the trial originally scheduled for April 28, 2023 on the motions to dismiss filed or joined by the Ad Hoc Committee, Savannah Capital, and H.I. Resorts Nashville, LLC has been continued and a status and scheduling conference has been scheduled for May 18, 2023. The Debtor explained that although it could file a plan now, it believes that additional time, with an extension of its exclusive periods, is an efficient way to preserve the status quo, and allow additional time for the parties to negotiate a plan. Deville Corp. is represented by: Daniel R. Fogarty, Esq. STICHTER RIEDEL BLAIN & POSTLER, P.A. 110 East Madison Street, Suite 200 Tampa, FL 33602 Tel: (813) 229-0144 Email: dfogarty@srbp.com About Deville Corp. Deville Corp. is a Single Asset Real Estate (as defined in 11 U.S.C. Sec. 101(51B)). Deville Corp. filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-04930) on Dec. 14, 2022. In the petition filed by Edgar L.T. Gay, as president and director, the Debtor reported assets between $10 million and $50 million and liabilities between $1 million and $10 million. Judge Catherine Peek McEwen oversees the case. The Debtor is represented by Daniel R. Fogarty, Esq. at Stichter, Riedel, Blain & Postler, P.A. DIAMOND SPORTS: Bonds Give 98.25% Payout at CDS Auction ------------------------------------------------------- Michael Tobin of Bloomberg News reports that Diamond Sports Group's CDS auction generated 98.25% bonds payout. Debt issued by bankrupt Diamond Sports Group LLC was valued at 1.75 cents on the dollar at an auction on April 12, 2023, according to Creditex and Markit, handing credit default swaps holders a 98.25% payout. The final price was slightly lower than the initial market midpoint of 2 cents. Net open interest to sell was $44.7 million and net notional outstanding for the CDS was $77.36 million as of April 7, 2023, according to the Depository Trust & Clearing Corporation. The participating bidders in the auction included Barclays Plc, BNP Paribas SA, Bank of America Corp., Citigroup Inc., Deutsche Bank AG, and Goldman Sachs Group. About Diamond Sports Group Diamond Sports Group, LLC operates as a sports marketing company. It offers seminars, combine, speed and agility assessments, recruiting tools, and online training sessions for sports including football, baseball, soccer, and basketball. Diamond Sports Group and 29 of its affiliates sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 23-90116) on March 14, 2023. In the petition filed by David F. DeVoe, Jr., as chief financial officer and chief operating officer, Diamond Sports Group listed $1 billion to $10 billion in both assets and liabilities. The Debtors tapped Porter Hedges, LLP as general bankruptcy counsel; Wilmer Cutler Pickering Hale and Dorr, LLP as conflicts counsel; AlixPartners, LLP as financial advisor; and Moelis & Company, LLC and Liontree Advisors, LLC as investment bankers. Kroll Restructuring Administration, LLC is the claims agent. DIAMOND SPORTS: Wants Discounted Contracts With MLB Teams --------------------------------------------------------- Jonathan Randles of Bloomberg Law reports that Major League Baseball's largest local broadcaster is seeking discounts on contracts to air three teams' games in a move the league has vowed to oppose. In a bankruptcy court hearing Thursday, Diamond Sports Group LLC's lawyer Ross Firsenbaum told Judge Christopher Lopez that its contracts with the Minnesota Twins, Cleveland Guardians and Arizona Diamondbacks are unreasonable and worth "materially" less than what the company was paying to exclusively broadcast games in those markets through its Bally Sports brand. Lawyers for the MLB and the three teams said the company is violating its contractual obligations that require periodic payments to continue broadcasting. About Diamond Sports Group Diamond Sports Group, LLC operates as a sports marketing company. It offers seminars, combine, speed and agility assessments, recruiting tools, and online training sessions for sports including football, baseball, soccer, and basketball. Diamond Sports Group and 29 of its affiliates sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 23-90116) on March 14, 2023. In the petition filed by David F. DeVoe, Jr., as chief financial officer and chief operating officer, Diamond Sports Group listed $1 billion to $10 billion in both assets and liabilities. The Debtors tapped Porter Hedges, LLP as general bankruptcy counsel; Wilmer Cutler Pickering Hale and Dorr, LLP as conflicts counsel; AlixPartners, LLP as financial advisor; and Moelis & Company, LLC and Liontree Advisors, LLC as investment bankers. Kroll Restructuring Administration, LLC is the claims agent. EL MONTE NATURE: Combined Disclosure & Plan Confirmed by Judge -------------------------------------------------------------- Judge Christopher B. Latham has entered findings of fact, conclusions of law and order confirming the Combined Disclosure Statement and Fifth Amended Plan of Reorganization of El Monte Nature Preserve, LLC. Confirmation standards under Section 1129 of the Bankruptcy Code: * Section 1129(a)(3) of the Bankruptcy Code. The Effective Plan has been proposed in good faith and not by any means forbidden by law. * Section 1129(a)(4) of the Bankruptcy Code. Any and all payments made or to be made, whether by El Monte or by anyone else, within the contemplation of Section 1129(a)(4) of the Bankruptcy Code, have been approved by the Court as reasonable, or are subject to the approval of the Court as reasonable. * Section 1129(a)(5) of the Bankruptcy Code. El Monte, as plan proponent, has disclosed the identity and affiliations of any individual proposed to serve, after confirmation, as any party within the meaning of Section 1129(a)(5)(A)(i) of the Bankruptcy Code; the appointment to (or continuance in) such office of such individual is consistent with Section 1129(a)(5)(A)(ii) of the Bankruptcy Code; El Monte, as plan proponent, has disclosed the identity of any insider that will be employed or retained by El Monte and the nature of any compensation for such insider by El Monte. * Section 1129(a)(6) of the Bankruptcy Code. No governmental regulatory commission has jurisdiction, before or after confirmation, over the rates of El Monte, and so therefore no approval of any rates of El Monte is relevant to confirmation of the Effective Plan. * Section 1129(a)(7) of the Bankruptcy Code. With respect to Section 1129(a)(7) of the Bankruptcy Code, as of the Confirmation Hearing and with respect to the Combined Disclosure Statement and Second Amended Plan (as balloted) and the Effective Plan, all impaired classes have voted to accept the Plan, so the best-interest test under Sections 1129(a)(7)(A) or (B) of the Bankruptcy Code does not apply with respect to the Plan or Effective Plan. A copy of the Plan Confirmation Order dated April 17, 2023 is available at https://bit.ly/41L27Lj from PacerMonitor.com at no charge. Attorneys for the Debtor: Michael D. Breslauer, Esq. Matthew Arvizu, Esq. SOLOMON WARD SEIDENWURM & SMITH, LLP 401 B Street, Suite 1200 San Diego, CA 92101 Tel: (619) 231-0303 Fax: (619) 231-4755 E-mail: mbreslauer@swsslaw.com marvizu@swsslaw.com About El Monte Nature Preserve El Monte Nature Preserve, LLC, filed for Chapter 11 protection (Bankr. S.D. Cal. Case No. 22-00971) on April 12, 2022, listing as much as $50 million in both assets and liabilities. William B. Adams, manager, signed the petition. Judge Christopher B. Latham oversees the case. Michael D. Breslauer, Esq., at Solomon Ward Seidenwurm & Smith, LLP and Thorsnes Bartolotta McGuire, LLP serve as the Debtor's bankruptcy counsel and special counsel, respectively. ELEMENT LLC: Placed Into Receivership ------------------------------------- The Andersons, Inc. (Nasdaq: ANDE) disclosed that on April 18, 2023, ELEMENT, LLC (ELEMENT), a joint venture with ICM, Inc. in which The Andersons, Inc. is a 51% owner, was placed into receivership pursuant to the Agreed Order Granting Application for Appointment of Receiver. The ELEMENT ethanol plant, located in Colwich, Kansas, is currently in an extended maintenance shutdown and future operating decisions will be made by the court-appointed receiver. The plant, which opened in 2019, has faced operational and market-based challenges. These have been exacerbated by a shift in the California Low Carbon Fuel Standard credit markets and high western corn basis. As previously disclosed, these challenging conditions led to the failure by ELEMENT to make a required debt payment and receipt of a default notice in February 2023. This debt of ELEMENT is non-recourse to the company. The company expects to record a non-cash pretax impairment charge on long-lived assets related to ELEMENT of approximately $85 - $95 million, 51% of which will be attributable to the company. This range is preliminary and will be finalized as part of the company's ongoing normal quarterly close process. These events are not expected to impact the company's previously communicated long-term EBITDA target. About The Andersons, Inc. The Andersons, Inc. -- http://www.andersonsinc.com-- is a diversified company rooted in agriculture that conducts business in the commodity merchandising, renewables, and plant nutrient sectors. ENVISION HEALTHCARE: In Talks With Creditors to Extend Grace Period ------------------------------------------------------------------- Rachel Butt, Erin Hudson and Eliza Ronalds-Hannon of Bloomberg News report that Envision Healthcare Corp. is in talks with creditors to extend its grace period on a late financial report amid mounting concerns over the physician staffing business's performance, according to people with knowledge of the situation. Envision missed a March 31, 2023 deadline to file its quarterly earnings, starting a 30-day grace period, the people said. The company is seeking advice from Kirkland & Ellis and PJT Partners, said the people, who asked not to be identified because the matter is private. One of the largest physician staffing companies in the US is weighing restructuring options that could potentially wipe out its PE owner's equity interests. Envision Healthcare, a KKR-backed physician staffing company, is talking to creditors to restructure its debt after facing a string of issues including a missed interest payment, weakened earnings and contract battles, The Wall Street Journal reported. The restructuring options reportedly include a debt-for-equity swap that could diminish or erase KKR's ownership stake in Envision. The company is also entertaining the option of filing for Chapter 11 bankruptcy protection. KKR took the Nashville-based company private in 2018 in an all-cash acquisition at a valuation of $9.9 billion. Envision missed an interest payment Saturday of around $40 million and entered a 30-day grace period, according to reports. Envision has around $1 billion in outstanding unsecured bonds that carry an 8.75% interest rate and are due in 2026, market data platform MarketAxess reported. The company also failed to make a timely disclosure of its Q4 financial results. About Envision Healthcare Envision Healthcare Corp., based in Nashville, Tennessee, is a leading national medical group, focused on investing in the future of health and wellness. FARMHOUSE CREATIVE: Unsecureds to Get $390 per Month for 5 Years ---------------------------------------------------------------- Farmhouse Creative, LLC, filed with the U.S. Bankruptcy Court for the Middle District of Florida a Subchapter V Plan of Reorganization dated April 18, 2023. Farmhouse is a closely held Florida limited liability company formed in 2019 for the purpose of acquiring and operating the KidzArt Orlando franchise. KidzArt Orlando offers a unique art enrichment program where children can learn to draw, learn about art, and enhance their creativity. To finance the acquisition of the KidzArt Orlando franchise, Farmhouse obtained a loan from Florida Business Development Corporation ("Lender") in the amount of approximately $320,000.00. On December 16, 2022, Farmhouse received a demand letter from Lender following a single missed Loan payment in the amount of $3,763.88. Pursuant to the demand letter, Lender indicated its intent to accelerate the Loan and pursue the recovery of approximately $340,000.00 from Farmhouse if its demands were not met. Prior to its receipt of the December 16th demand letter, Farmhouse had attempted to negotiate a loan modification with Lender in an effort to preserve its ongoing operations and avoid litigation with Lender. Unfortunately, Farmhouse was unable to reach an agreement with Lender and had no remaining options following receipt of Lender's demand letter. Faced with the prospect of costly litigation with Lender, Farmhouse elected to pursue Chapter 11 relief to restructure its financial affairs and preserve its going concern value of benefit of its creditors and estate. Class 1 consists of the Allowed Secured Claim of Florida Business Development Corporation ("FBC"). FBC's Class 1 Claim is secured by a lien on substantially all of the Personal Property of Farmhouse Creative, LLC (the "Farmhouse Collateral"). In full satisfaction of its Class 1 Allowed Claim, FBC shall retain its lien on the Farmhouse Collateral, and shall receive payment of its Allowed Class 1 Claim, minus any payments received after the Petition Date (if any), in equal monthly payments commencing on the Effective Date based upon the amortization schedule with a maturity date occurring on the last day of the 60th month following the Effective Date (the "Maturity Date"). Class 2 consists of all Allowed General Unsecured Claims against the Debtor. In full satisfaction of their Allowed Class 2 General Unsecured Claims, Holders of Class 2 Claims shall receive monthly pro rata distributions of $390.24 over a term of 5 years from the Effective Date after Administrative Claims, Priority Claims are satisfied in full. The maximum Distribution to Class 2 Claimholders shall be equal to the total amount of all Allowed Class 2 General Unsecured Claims. Class 2 is Impaired. Class 3 consists of all equity interests in Farmhouse Creative, LLC. Class 3 Interest Holders shall retain their respective Interests in Farmhouse Creative, LLC in the same proportions such Interest were held as of the Petition Date (i.e., 51% Interest to Dawn Farmer and 49% interest to Jason Farmer). Class 3 is Unimpaired. The Plan contemplates the Debtor will continue to manage and operate its business in the ordinary course, but with restructured debt obligations and reduced operating expenses. It is anticipated that the revenue from ordinary course business and collection of outstanding accounts receivable will be sufficient to make the Plan Payments and satisfy all Allowed Claims in full. Funds generated from the Debtor's operations through the Effective Date will be used for Plan Payments; however, the Debtor's cash on hand as of Confirmation will be available for payment of Administrative Expenses. A full-text copy of the Subchapter V Plan dated April 18, 2023 is available at https://bit.ly/3H283Ys from PacerMonitor.com at no charge. Attorneys for the Debtor: Daniel A. Velasquez, Esq. Latham Luna Eden &Beaudine, LLP 201 S. Orange Ave., Suite 1400 Orlando, FL 32801 Tel: (407) 481-5800 Fax: (407) 481-5801 Email: dvelasquez@lathamluna.com About Farmhouse Creative Farmhouse Creative, LLC is a closely held Florida limited liability company formed in 2019 for the purpose of acquiring and operating the KidzArt Orlando franchise. KidzArt Orlando offers a unique art enrichment program where children can learn to draw, learn about art, and enhance their creativity. Farmhouse Creative sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-00178) on Jan. 18, 2023. In the petition signed by its managing member, Dawn Farmer, the Debtor disclosed up to $500,000 in both assets and liabilities. Judge Tiffany P. Geyer oversees the case. Daniel A. Velasquez, Esq., at Latham Luna Eden and Beaudine LLP, is the Debtor's legal counsel. FIRST PREMIER: Unsecureds Will Get 100% of Claims in 60 Months -------------------------------------------------------------- First Premier Funding, LLC, filed with the U.S. Bankruptcy Court for the Northern District of Illinois a Disclosure Statement describing Plan of Reorganization dated April 20, 2023. The Debtor is the proponent of this Plan as well as the Disbursing Agent. This Plan provides for distributions to the holders of allowed claims from the sale of Real Estate commonly known as 17100 Halsted Street, Harvey, Illinois (PIN 29-29-206-024-0000 and PIN 29-29-206-020-0000) ("the Property"). The Debtor's Plan of Reorganization provides that Debtor upon the entry of a Judgment in favor of the Debtor in the Adversary Proceeding (23-00045) with Cook County d/b/a Cook County Land Bank Authority that the Debtor will begin making plan payments. In general, the Debtor will pay Administrative Claims (One Class), Two Impaired Secured Creditors (2 Claims), and an Impaired Class of General Unsecured Creditors (5 Claims). It is believed that all creditors shall receive 100% of their allowed claim. Class 1 Cook County d/b/a Cook County Land Bank Authority holds the real estate tax arrears of $400,000.00 for the arrears. Debtor shall make sixty-month payments of $6,666.67 each to the Cook County d/b/a Cook County Land Bank Authority beginning on the fifteenth of the month after Judgment has been entered in favor of the Debtor in the Adversary Proceeding. Class 2 the Cook County Treasurer holds the real estate tax arrears of $345,211.17 for the current real estate taxes. Debtor shall make sixty-month payments of $5,753.52 each to the Cook County d/b/a Cook County Land Bank Authority beginning on the fifteenth of the month after Judgment has been entered in favor of the Debtor in the Adversary Proceeding. Class 3 consists of General Unsecured Claims. ComEd Bankruptcy Department - $1,989.19; Holdings Group - $44,837.21; New Way Investments LLC - $199,078.56; Nicor Gas - $1,900.00; and Peoples Energy - $6,400.00 totaling $276,804.96 shall be paid pro rata over sixty months of $4,613.42 beginning on the fifteenth of the month after Judgment has been entered in favor of the Debtor in the Adversary Proceeding. Debtor predicts all unsecured creditors shall be paid 100% of their allowed claims. The Debtor will fund this this plan through the liquidation of the Champlain Property. A full-text copy of the Disclosure Statement dated April 20, 2023 is available at https://bit.ly/3AldGgB from PacerMonitor.com at no charge. Debtor’s Counsel: Paul M. Bach, Esq. Bach Law Offices, Inc. P.O. Box 1285 Northbrook, IL 60065 Telephone: (847) 564-0808 Facsimile: (847) 564-0985 Email: pnbach@bachoffices.com About First Premier Funding First Premier Funding LLC is a Single Asset Real Estate (as defined in 11 U.S.C. Sec. 101(51B)). The Debtor is the holder of the beneficial interest to a property located at 17100 S. Halsted Harvey, Ill. (title is held in private land trust). The Debtor's interest in the property is valued at $2 million. First Premier Funding filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 23-00811) on Jan. 21, 2023. In the petition filed by Tiffany Webb, member, the Debtor reported assets between $500,000 and $1 million and liabilities between $1 million and $10 million. Judge Lashonda A. Hunt oversees the case. Paul M. Bach, Esq., and Penelope N. Bach, Esq., at Bach Law Offices, Inc., serves as the Debtor's counsel. FORMA BRANDS: Acquired Out of Chapter 11 With CEO Brady ------------------------------------------------------- Kathryn Hopkins of WWD reports that Forma Brands, the parent company of Morphe and Lipstick Queen, among others, has been acquired by lenders from bankruptcy. In addition to Jefferies Finance LLC, funds managed by Cerberus Capital Management LP, and FB Intermediate Holdings LLC, the company's new owners now also include &vest, a consumer brand investment and operational platform. Thomas Brady, president of Jefferies Finance, said, "On behalf of the entire investor group, we are pleased to complete the acquisition of Forma Brands, enabling the company to move forward in a position of financial strength. With a new capital structure that includes additional liquidity and less debt, Forma Brands is poised to return to growth and increase profitability while it continues providing consumers around the globe with thoughtfully selected beauty products." Moskowitz said, "All of us at &vest are excited about this new partnership, and we look forward to helping to return Forma Brands to growth. We see compelling opportunities to drive growth in the business, including new products, geographies and channel and distribution partners — all of which we are going to pursue." Forma was formed in 2020 as part of the business' diversification efforts. Prior to that, General Atlantic had acquired a 60 percent stake in Morphe in 2019, which was at the time a popular brand run by brother and sister Chris and Linda Tawil that grew in large part due to partnerships with influencers. At the time of the deal Morphe was said to be doing about $500 million in net sales, with about $130 million in earnings before interest, taxes, depreciation and amortization and the deal valued the company at $2.2 billion. But then several factors occurred that weighed on Morphe's performance. First, COVID-19 struck, leading color cosmetics sales to decline industrywide. Then Morphe cut ties with Jeffree Star and James Charles amid allegations of inappropriate behavior. Plus, supply chain issues plagued the business. As part of diversification efforts, the business launched a sub-brand, Morphe 2, and made several acquisitions, including Lipstick Queen and Playa, and incubated brands, including Bad Habit. Last March, former Too Faced executive Eric Hohl joined Forma as CEO, taking over from Myles McCormick, who led the business through its growth era. Hohl was president at Too Faced when General Atlantic sold it to the Estée Lauder Cos. for $1.45 billion in 2016. But all these measures were not enough to prevent it from filing for bankruptcy. About FORMA Brands FORMA Brands -- https://www.FORMABrands.com/ -- is a builder of beauty brands anchored in innovative and high-quality products, marketing and operations. Each brand showcases differentiated products and a unique story, addressing different segments of the beauty market, while embracing many forms of beauty. The Company's products are sold through the top beauty retailers worldwide, including Ulta Beauty, Sephora, Mecca, Douglas, Selfridges, and Target. Forma Brands LLC, its parent FB Debt Financing Guarantor, LLC (f/k/a Morphe Debt Financing Guarantor, LLC), and several affiliates sought Chapter 11 protection in Delaware on Jan. 11 and 12, 2023. The lead case is in re FB Debt Financing Guarantor, LLC (Bankr. D. Del. Case No. 23-10025). The Debtors estimated $500 million to $1 billion in assets and liabilities as of the bankruptcy filing. The Debtors tapped ROPES & GRAY LLP as general bankruptcy counsel; BAYARD, P.A. as Delaware counsel; and CONFIGURE PARTNERS, LLC as investment banker. ANKURA CONSULTING GROUP, LLC, is the CRO provider and financial advisor. KROLL, LLC, is the claims agent. FOX SUBACUTE: Sabra Health Says Disclosures Inadequate ------------------------------------------------------ Sabra Health Care Pennsylvania, LLC, objects to the Disclosure Statement in support of Joint Plan of Reorganization filed by Fox Subacute at Mechanicsburg, LLC, Fox Subacute at Clara Burke, Inc., Fox Subacute At South Philadelphia, LLC, and Fox Subacute at Warrington. Sabra is a creditor of both Warrington and Clara Burke (the "Tenant Debtors") pursuant to the terms of that certain Master Lease dated effective as of March 30, 2012, the First Amendment to Master Lease dated effective as of March 30, 2012, Second Amendment to Master Lease dated as of October 6, 2016, and Third Amendment dated as of April 20, 2018 (as amended, the "Sabra Lease"). Sabra points out that the Plan provides that the Sabra Administrative Claim is a Class 2 claim, but that it will be paid in accordance with Section 5 of the plan governing the Sabra Prepetition Claim. The Plan provides that the administrative expense claims of other creditors shall be paid in the ordinary course of business or as otherwise agreed by the parties. Sabra claims that the Disclosure Statement fails to inform creditors that Sabra did not consent to the proposed treatment of the Sabra Administrative Claim, nor does it inform creditors that such proposed treatment is contrary to Section 1123(a)(4) which requires that a plan provide the same treatment for each claim or interest of a particular class, unless the holder of a particular claim or interest agrees to a less favorable treatment of such particular claim or interest. Furthermore, the source of payment of any portion of the Sabra Prepetition Claim and the Sabra Administrative Claim is not clear from the terms of the Plan or the Disclosure Statement. Sabra contends that the Plan is a plan of liquidation, yet provides at Section 6.10.3 for the assumption of all agreements for cell phone use, utilities, licenses and the like. The Disclosure Statement provides at Section 7.5 that all agreements for cell phone use, or any other licenses or utility agreements are rejected as of the Effective Date. Sabra asserts that both the Plan and the Disclosure Statement provide that the proceeds of litigation commenced by the Committee against Fox Subacute Management and Emerald Green Landscaping will be paid to Class 6 Creditors regardless of whether the Class 1 through 5 claims have been fully satisfied. The Disclosure Statement fails to inform creditors that such a distribution, without first satisfying administrative expense and priority claims, or including the deficiency claims of Sabra or Peoples in Class 6, is contrary to the priorities established in the Bankruptcy Code and Section 1129(a) of the Bankruptcy Code Sabra further asserts that the Disclosure Statement also fails to provide adequate information regarding the claims of Syndicate ASC 1414 Lloyd's of London ("Ascot") as described in Ascot's Objection to Disclosure Statement for Liquidating Debtors. A full-text copy of Sabra's objection dated April 17, 2023 is available at https://bit.ly/41QCCsg from PacerMonitor.com at no charge. Counsel for Sabra Health: Wendy D. Brewer, Esq. FULTZ MADDOX DICKENS, PLC 333 N. Alabama Street, Ste. 350 Indianapolis, IN 46204 Telephone: (317) 215-6220 E-mail: wbrewer@fmdlegal.com About Fox Subacute at Mechanicsburg Fox Subacute at Mechanicsburg, LLC, is a skilled nursing facility in Pennsylvania that specializes in pulmonary, neurological, and rehabilitative care for patients with degenerative neurological and neuromuscular disease; and pulmonary care and ventilator requirements with an emphasis on vent weaning. Its facilities are located in Plymouth Meeting, Warrington, Mechanicsburg and Philadelphia, Pa., and are licensed by the PA Department of Health. On Nov. 1, 2019, Fox Subacute at Mechanicsburg and its affiliates sought Chapter 11 protection (Bankr. M.D. Pa. Lead Case No. 19-04714). Fox Subacute at Mechanicsburg was estimated to have $1 million to $10 million in assets and liabilities as of the bankruptcy filing. Judge Henry W. Van Eck oversees the cases. The Debtors tapped Cunningham, Chernicoff & Warshawsky, P.C. as their legal counsel, Kennedy P.C. as special counsel, Isdaner & Company, LLC as accountant, and Three Twenty-One Capital Partners, LLC as investment banker. The Office of the U.S. Trustee appointed an official committee of unsecured creditors on Dec. 11, 2019. The committee is represented by Flaster/Greenberg P.C. FRANKO CATH: Rental Income to Fund Plan Payments ------------------------------------------------ Franko Cath, LLC, filed with the U.S. Bankruptcy Court for the Eastern District of New York a Disclosure Statement describing Plan of Reorganization dated April 20, 2023. The Debtor is a New York corporation formed on April 3, 2007. The Debtor is the current owner in fee of a mixed-use building, comprised of a store and two apartments, located at 118-09 Liberty Avenue, South Richmond Hill, New York (the "Property"). The Debtor was unable to obtain a replacement tenant for its commercial space at the Property until on or about February 1, 2023. Unfortunately, Wilmington had commenced foreclosure proceedings and was moving toward a judgment. Further, Wilmington was unwilling to work out a repayment plan to deal with its accrued arrears. Ultimately, the Debtor filed for relief under Chapter 11 of the Bankruptcy Code so as to afford to it the opportunity to restructure its existing debt and to protect its investment. It is not anticipated that any priority or general unsecured claims shall be filed in this case. Class 2 consists of the secured claim of Wilmington Savings Fund Society. Wilmington is the holder of the first mortgage of record encumbering Debtor's Property. The outstanding balance on this obligation as of the petition date was $851,844.22, inclusive of mortgage arrears of $212,603.98. The Debtor shall repay its mortgage arrears to Wilmington, with interest thereon at the rate of 4% per annum, over a term of 96 months commencing on the effective date of the Plan. Class 2 is not impaired. Class 3 consists of the secured claim of the NYC Water Board. The outstanding balance on this obligation as of the petition date was $9,632.22. The secured claim of the NYC Water Board shall be paid with statutory interest of 4% per annum over a term of 60 months, commencing on the effective date of the Plan. Class 3 is not impaired. Class 4 shall consist of all allowed general unsecured claims. Class 4 claimants, if any, shall be paid in full on the effective date. As such, the debtor shall pay the amount of the allowed claims, as set by the Court, to Class 4 claimants on the effective date. Class 4 is not impaired. The Debtor estimates that the cash required to confirm the Plan will total approximately $8,800.00. The monies needed on confirmation consist of the professional fees, estimated administrative fees which may be owed to either the Office of the United States Trustee or to the Clerk of the Court at the time of confirmation, any taxing authority relating to a post-petition tax obligation, and initial plan payments to all Class II, Class III and Class IV creditors. The Debtor proposes to raise these monies from the rental income generated from the Debtor's Property located at 118-09 Liberty Avenue, South Richmond Hill, New York. A full-text copy of the Disclosure Statement dated April 20, 2023 is available at https://bit.ly/3mNwYs4 from PacerMonitor.com at no charge. Attorney for Debtor: Richard S. Feinsilver, Esq. One Old Country Road, Suite 345 Carle Place, NY 11514 Tel: (516) 873-6330 Fax: (516) 873-6183 Email: feinlawny@yahoo.com About Franko Cath Franko Cath LLC owns in fee simple title a mixed-use property (store/apartments) located at 118-09 Liberty Avenue, South Richmond Hill NY valued at $1.50 million. Franko Cath LLC filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 23-40484) on January 13, 2023. In the petition filed by Franklin Oquendo, as managing member, the Debtor reported assets between $500,000 and $1 million and liabilities between $1 million and $10 million. The case is overseen by Honorable Bankruptcy Judge Nancy Hershey Lord. The Debtor is represented by Richard S. Feinsilver, Esq. FTX GROUP: Deltec Ordered to Repay $53 Million Loan to Alameda -------------------------------------------------------------- Jack Schickler of CoinDesk reports that a Delaware-based bankruptcy court judge ruled on Wednesday, April 12, 2023, that FTX's trading arm Alameda Research should be repaid nearly $53 million for a loan originally made in 2021 to Deltec International Group. The federal court is attempting to unwind the affairs of the FTX after it filed for bankruptcy protection in November, complicated by an apparent lack of reliable records kept by the crypto exchange. Deltec, a Cayman Islands company whose banking arm serves stablecoin company Tether, "shall and is hereby authorized and directed to pay to Alameda an amount equal to USD 52,859,644," plus $10,538 in interest per day, bankruptcy Judge John Dorsey said in an order. The original payment of 50 million in USDT, Tether's stablecoin pegged to the U.S. dollar, was made from Alameda to Deltec in 2021. The contract was approved by FTX Digital Markets' co-Chief Executive Officer Ryan Salame, purporting to act as director of a further company called Norton Hall, though, according to earlier court filings by FTX, he never held such a position and wasn’t authorized to act as such. John J. Ray III, a restructuring expert who took over as FTX CEO in November, has repeatedly bemoaned poor governance prior to his tenure. In a Sunday, April 9, 2023, filing, Ray said that Alameda had fabricated portfolio reports, and that records of loans and other financial transactions made by the company were "inaccurate, contradictory or missing entirely." A spokesperson for Deltec told CoinDesk it had been attempting to settle the loan since December, but had needed guidance on exactly which entity to repay given uncertainties in the paperwork. "With the judge's ruling, we will now move forward with repayment of the full amount, and are pleased to be able to finally conclude this matter," the spokersperson said. 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 GROUP: Has Recovered $7.3 Billion During Bankruptcy ------------------------------------------------------- Gabrielle Saulsbery of Banking Dive reports that collapsed crypto exchange FTX has recovered more than $7.3 billion in cash and liquid crypto assets during its bankruptcy process, FTX’s legal team said in a bankruptcy court hearing Wednesday, April 12, 2023. "The situation has stabilized, and the dumpster fire is out," attorney Andy Dietderich told the court, according to a Reuters report. However, the exchange is still "far away from an equity distribution," he said. Dietderich also told the court Wednesday, April 12, 2023, that there was a possibility that FTX could reopen in the future, a plan that would require raising significant capital. If the company decides to start anew, they would have to decide if that capital would come from FTX's estate or a third party, Dietderich said. "There are possibilities that customers could have an option to take part of their proceeds that they would otherwise receive in cash from the estate and receive some kind of an interest in the exchange going forward," Dietderich told the court. Restarting the exchange, however, is one of many possibilities, Dietderich said. There are "as many opinions on this...as there are professionals involved in this case," Dietderich said. "And that's a lot." FTT, FTX's native token, saw a sharp increase in price following Wednesday's bankruptcy hearing from $1.32 to $2.70. As of 10:45 a.m. Friday, April 14, 2023, the price had dropped to $2.02. A similar price jump occurred in January when current CEO John Ray, who took over in November 2022, said that he was considering restarting FTX’s international arm eventually. FTT rose to $2.37 at the time. Current numbers, however, are dwarfed by FTT’s all-time high of $79.53. Ari Paul, founder of BlockTower Capital, opined on Twitter that the FTT token is "extremely unlikely to have any relation to FTX ever again" and that the tokens were likely just "collectibles" now. FTT will likely have no place in FTX's reincarnation, Paul said, because the token "had no legal status relative to FTX" and because it’s "likely illegal.” The exchange is working on a Chapter 11 plan that would lead it out of bankruptcy, and intends to file the plan by July 2022, Dietderich said in court Wednesday, April 12, 2023. The company doesn't expect any plan to be approved prior to the second quarter of 2024. 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 GROUP: May Use Creditors' Money, Raise Cash to Restart Exchange ------------------------------------------------------------------- Steven Church of Bloomberg News reports that FTX may use money marked to repay customers to restart its failed crypto exchange because the project would require a significant amount of cash, a lawyer for the company said in court Wednesday, April 12, 2023. The company is still in the early stages of deciding whether to bring back the exchange, which allowed customers to trade digital assets before FTX collapsed, Andrew G. Dietderich, an FTX attorney with law firm Sullivan & Cromwell told US Bankruptcy Judge John T. Dorsey. The company could also try to raise money to fund a restart or drop the entire concept. 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 GROUP: Mysten Labs Completes Repurchase of Stake ---------------------------------------------------- Mysten Labs, a web3 infrastructure company and initial developer of the Sui Layer 1 blockchain, disclosed that it has completed a repurchase of an equity stake in the Company and warrant rights to purchase SUI tokens previously held by FTX Ventures Ltd. and affiliated entities (collectively, "FTX") for approximately $96 million. The transaction, which includes FTX's entire equity stake in Mysten and all of FTX's warrant rights to purchase SUI tokens, was approved by the United States Bankruptcy Court for the District of Delaware as part of FTX's Chapter 11 bankruptcy proceedings. The stake was originally purchased by FTX as part of Mysten's $300 million Series B fundraise, which was announced in September 2022. "We are very pleased to close this transaction, which speaks to the tremendous confidence we have in our capabilities, technology and partnerships, while also enabling us to preserve flexibility in how we operate our business. We look forward to continuing to scale our platform and build alongside the most exciting and innovative web3 companies in the world," said Evan Cheng, Co-Founder and Chief Executive Officer of Mysten Labs. About Mysten Labs Mysten Labs -- https://mystenlabs.com -- is a team of leading distributed systems, programming languages, and cryptography experts whose founders were senior executives of Meta's Novi Research and lead architects of the Diem blockchain and Move programming language. The mission of Mysten Labs is to create foundational infrastructure for web3. About FTX Trading 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. 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. Katherine Stadler, the court-appointed fee examiner, is represented by Godfrey & Kahn, SC. FTX GROUP: Paid Bankruptcy Lawyers $32.5 Million Fees in February ----------------------------------------------------------------- Suzuki Shillsalot of AMB Crypto reports that according to court filings between 4 - 10 April 2023, during the month of February 2023, the fees of law firms involved in FTX's bankruptcy proceedings totaled around $32.5 million. The law firm Quinn Emanuel Urquhart and Sullivan sought over $2.7 million in reimbursements for February 2023. The firm's partners charged between $1,246 and $1,917 per hour, while associates charged between $747 and $1,183 per hour. The firm's total number of hours billed was nearly 2,610. The law firm Alvarez and Marsal and forensic investigation consultant Alix Partners disclosed their February 2023 fee statements, which totaled more than $11.9 million and $3.6 million, respectively. Law firm Sullivan and Cromwell demanded the largest amount, as they presented a bill of $13.4 million. Additionally, in February 2023, FTX paid investment banking firm Perella Weinberg Partners $77,891. Moreover, they paid bankruptcy co-council Landis Rath and Cobb $582,604 in the same month. 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 GROUP: SBF Denied Access to D&O Insurance Coverage ------------------------------------------------------ Alex Wolf of Bloomberg Law reports that Sam Bankman-Fried, the embattled founder of FTX, failed in his bid to potentially tap up to $10 million worth of the failed crypto trading platform's insurance policies for his legal defense costs. Bankman-Fried has provided "zero evidence" showing why he should be allowed to tap directors and officers insurance policies issued to an FTX entity, West Realm Shires Inc., Judge John T. Dorsey of the US Bankruptcy Court for the District of Delaware ruled at a hearing Wednesday, April 12, 2023. The criminally-indicted former head of FTX had sought to lift the company's bankruptcy protections in an effort to access funds that would help cover mounting legal costs stemming from multiple class action suits and government cases. FTX and its creditors opposed his request, arguing that he shouldn't be entitled to the policies’ benefit before others. Ruling after the parties failed to reach an agreement, Dorsey said he had "no choice but to deny the motion for lack of evidence." Bankman-Fried has so far failed to show what harm he might endure without the coverage and what other assets he has to cover his legal expenses, the judge said. But Bankman-Fried is free to come back at some point in the future to make his case for relief through an evidentiary hearing, Dorsey concluded. The one-time billionaire and crypto icon is seeking funds from the policies following the spectacular collapse of his cryptocurrency trading platform and closely linked investment firm Alameda Research last 2022. He faces myriad allegations of running businesses built on extreme mismanagement and fraud. 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. GEX MANAGEMENT: Incurs $1.1 Million Net Loss in 2022 ---------------------------------------------------- GEX Management, Inc. has filed with the Securities and Exchange Commission its Annual Report on Form 10-K disclosing a net loss of $1.13 million on $2.27 million of revenues for the year ended Dec. 31, 2022, compared to a net loss of $6.21 million on $1.30 million of revenues for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $462,814 in total assets, $1.84 million in total liabilities, and a total shareholders' deficit of $1.38 million. Houston, Texas-based Hudgens CPA, PLLC, the Company's auditor since 2021, issued a "going concern" qualification in its report dated April 15, 2023, citing that the Company has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. A full-text copy of the Form 10-K is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1681556/000149315223012527/form10-k.htm About GEX Management GEX Management, Inc. -- http://www.gexmanagement.com-- is a provider of business services, consulting and staffing solutions to corporations across the nation. The Company provides both long and short-term consulting and staffing solution services, including corporate consulting, enterprise strategy and technology consulting, enterprise project management; grey, white and blue collar staffing solutions and Human Capital Management (HCM) solution capabilities. GILBERT BARBEE: Seeks to Extend Plan Exclusivity to July 28 ----------------------------------------------------------- Gilbert, Barbee, Moore & McIlvoy P.S.C. asks the U.S. Bankruptcy Court for the Western District of Kentucky to extend the periods during which only the Debtor may file a Chapter 11 plan and solicit votes thereof to July 28, 2023 and November 1, 2023, respectively. The Court had set April 28, 2023 as the deadline for the Debtor to file its disclosure statement and Chapter 11 plan. The Debtor explained that its bankruptcy proceedings involve an expansive business operation with many millions of dollars of assets and liabilities, and it has recently shifted its focus to manage the potential resolution of some of the existing malpractice claims. The Debtor also stated that it is in the process of negotiating potential settlements with tort creditors, in order to maximize the benefit to the bankruptcy estate. The Debtor said it "needs additional time to work with parties in interest to analyze all relevant issues before a plan and disclosure statement can be submitted." Gilbert, Barbee, Moore & McIlvoy P.S.C. is represented by: Brian R. Pollock, Esq. Alisa Micu, Esq. STITES & HARBISON PLLC 400 West Market Street, Suite 1800 Louisville, KY 40202-3352 Tel: (502) 587-3400 Email: bpollock@stites.com amicu@stites.com - and - Charity S. Bird, Esq. KAPLAN JOHNSON ABATE & BIRD LLP 710 West Main Street, 4th Floor Louisville, KY 40202 Tel: (502) 416-1630 Email: cbird@kaplanjohnsonlaw.com About Gilbert, Barbee, Moore & McIlvoy Gilbert, Barbee, Moore & McIlvoy P.S.C. -- https://www.gravesgilbert.com/ -- is a multi-specialty clinic in Bowling Green, KY. Graves Gilbert Clinic was founded in 1937 by Dr. G.Y. Graves and Dr. Tom Gilbert. Gilbert, Barbee, Moore & McIlvoy filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Ky. Case No. 22-10763) on Dec. 29, 2022. In the petition filed by Steven K. Sinclair, as chief financial officer, the Debtor reported assets and liabilities between $10 million and $50 million. The Debtor is represented by Charity S Bird, Esq. at Kaplan Johnson Abate & Bird LLP. GMS INC: S&P Rates New $500MM Senior Secured Term Loan 'BB-' ------------------------------------------------------------ S&P Global Ratings assigned its 'BB-' issue-level rating and '3' recovery rating to GMS Inc.'s proposed $500 million senior secured term loan due 2030. The '3' recovery rating indicates its expectation for meaningful (50%-70%; rounded estimate: 60%) recovery in the event of a payment default. GYP Holdings III Corp. is the borrower of the term loan B. The company intends to use the proceeds from this issuance, along with cash on hand, to refinance its existing term loan ($501 million outstanding) and pay related fees and expenses. S&P's 'BB-' issuer credit rating and stable outlook on GMS, as well as its 'B' issue-level rating on its senior unsecured debt, are unchanged. GREER TRANSPORT: Unsecureds Will Get 40% of Claims in Plan ---------------------------------------------------------- Greer Transport, LLC, filed with the U.S. Bankruptcy Court for the Middle District of Florida a Chapter 11 Plan under Subchapter V dated April 18, 2023. Debtor was formed by Robert B. Greer as a single member LLC in 2005. Debtor is a commercial trucking operation which transports materials for third parties. The business operations of the Debtor are located at 486 NW 68th Avenue Ocala FL 34482. Debtor developed cash flow problems when the economy slowed due to the Covid pandemic. This was made worse with the increasing high costs of labor and fuel due to inflationary pressure on the economy. Debtor began factoring its account receivables, however, the high cost associated with factoring made matters worse. Due to collection efforts of those who held factoring agreements, it was necessary to seek relief under Chapter 11 Subchapter V. Debtor proposes to pay plan payments of $13,965 each month for 36 months. If the estate were liquidated there would be available for distribution to unsecured creditors the sum of $274,690 after taking into account all liens and costs of liquidation. Debtor estimates a total of $331,075 will be distributed to creditors holding nonpriority unsecured claims. Debtor estimates there are $834,057.09 of allowable nonpriority unsecured claims. Creditors holding nonpriority unsecured claims will receive distributions equal to 40% of all such claims without interest. Class 3 consists of Priority Unsecured Claims. The Internal Revenue Service holds the only claim in this class and has filed Claim 5 indicating it holds an estimated $50,273.32 in priority claims. The records of the Debtor indicate only $1,298.66 and an objection to Claim 5 will be filed by Debtor. The allowed amount of the Claim will be paid in 36 equal monthly payments commencing on the effective date of the plan which are sufficient to satisfy the claim without interest. This is an unimpaired class. Class 4 is comprised of nonpriority unsecured claim. There are an estimated $834,057.09 allowed claims in this class. This class shall receive a distribution of all available funds after disbursements are made to administrative claims, Class 1 claims, Class 2 claims and Class 3 claims. Notwithstanding the foregoing, creditors in this class shall not be entitled to receive an amount in excess of their allowed claim. Payments will be disbursed on a pro rata basis each month for 36 months. This is an impaired class. Class 5 is comprised of the equity interests in the estate held by Debtor. The rights of Debtor in this class shall remain unaltered and unchanged. This is an unimpaired class. This Plan of Reorganization under subchapter V of chapter 11 of the Bankruptcy Code proposes to pay creditors of the Debtor from future monthly income derived from the operation of its commercial trucking operation and repair shop. A full-text copy of the Subchapter V Plan dated April 18, 2023 is available at https://bit.ly/43WW7AW from PacerMonitor.com at no charge. Attorney for Debtor: Richard A. Perry, Esq. Richard A. Perry, P.A. 820 East Fort King Street Ocala, FL 34471-2320 Tel: 352-732-2299 Email: richard@rapocala.com About Greer Transport LLC Greer Transport LLC is a family-owned and operated trucking company based out of Ocala, FL. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 23 00124) on Jan. 20, 2023. In the petition signed by Charles A. Greer, member and manager, the Debtor disclosed $437,242 in assets and $1,696,803 in liabilities. Judge Jacob A. Brown oversees the case. Richard A. Perry P.A., is the Debtor's legal counsel. GYP HOLDINGS III: Moody's Rates New Senior Secured Term Loan 'Ba2' ------------------------------------------------------------------ Moody's Investors Service assigned a Ba2 rating to GYP Holdings III Corp.'s (operating as GMS Inc.) proposed senior secured term loan due 2030. Proceeds from the new term loan and cash on hand will go towards paying off the company's existing senior secured term loan due 2025 and related fees and expenses in a leverage-neutral transaction. The Ba2 rating on the existing term loan will be withdrawn upon full redemption. GMS' Ba2 Corporate Family Rating, Ba2-PD Probability of Default Rating and the B1 rating on the company's senior unsecured notes due 2029 are not affected. The company's speculative grade liquidity (SGL) rating remains SGL-1. The outlook is stable. Moody's views the proposed transaction as credit positive, resulting in an extended maturity profile. GMS' $950 million asset based revolving credit facility is the nearest credit facility that comes due, reverting to its stated maturity in December 2027. There will be some additional interest costs, which is not material relative to GMS' total interest expense of about $70 million, which includes Moody's adjustments, for the last twelve months ending January 31, 2023. Assignments: Issuer: GYP Holdings III Corp. Backed Senior Secured Bank Credit Facility, Assigned Ba2 (LGD4) RATINGS RATIONALE GMS' Ba2 CFR is well positioned to contend with the material reduction in new single-family housing starts, a key revenue driver for wallboard (40% of year-to-date revenue). Moody's estimates adjusted debt-to-EBITDA of around 2.5x at fiscal year-end 2024 (April 30). The low leverage provides substantial financial flexibility. Holding balance sheet debt of around $1.4 billion steady, EBITDA would have to decline by an additional 22% to reach 3.25x leverage, the trigger that could result in downward rating pressure. Moody's estimate of leverage in fiscal 2024 includes adjusted EBITDA of around $550 million, which is 20% lower than the $695 million GMS achieved for the last twelve months ended September 30, 2022, and no material change in debt. Moody's approximates adjusted EBITDA margin declining to around 11% over the next year based on revenue of about $5 billion for fiscal-year 2024, from a record high of 13% for the last twelve months ended September 30, 2022. Margins are negatively impacted mainly by lower volumes in new home construction and reduced operating leverage from that decline. Moody's forward view for GMS' operating performance is slightly better than pre-pandemic results and indicative of the company's normalized run rate. Regardless, operating performance is one of GMS' greatest credit strengths. Residential construction is exhibiting high volatility characteristics. Moody's projects a meaningful drop in new single-family housing starts to around 821,000 in 2023, about 18.5% below 2022 and to a to a level representative of a five-year average before the pandemic. A slight pickup of 2% in new single family housing construction in 2024 is anticipated as demand and the market rebalances. Commercial construction, the main driver for steel framing and ceiling grids (aggregating to 31% of year-to-date revenue), is moderating. GMS' SGL-1 Speculative Grade Liquidity Rating reflects the company's very good liquidity profile, generating free cash flow of at least $300 million over the next year. Working capital will be a source of cash as GMS will work through existing inventory due to lower demand. Excess cash will be used to build liquidity, reducing revolver borrowings and increasing cash on hand for acquisitions. Cash on hand was $187 million on January 31, 2023 and revolver availability totaled $655 after considering $240 million in borrowings to fund acquisitions, $24 million in letter of credit commitments and the borrowing base formula. The stable outlook reflects Moody's expectation that GMS will continue to perform well despite contracting end markets. Low leverage, very good liquidity, no maturities until late 2027 and ongoing conservative financial policies further support the stable outlook. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING An upgrade of GMS' ratings could ensue if end markets remain supportive of organic growth such that adjusted debt-to-EBITDA is near 2x. Upwards rating movement also requires preservation of very good liquidity and conservative financial policies. A downgrade could occur if GMS' adjusted debt-to-EBITDA is above 3.25x. Negative ratings pressure may also occur if the company experiences a weakening of liquidity or adopts a more aggressive financial strategy, particularly with respect to acquisitions and share repurchases. The principal methodology used in this rating was Distribution and Supply Chain Services published in February 2023. GMS Inc., headquartered in Tucker, Georgia, is a North American distributor of wallboard, steel framing, ceiling systems and other related building products. HUGHES SATELLITE: S&P Affirms 'BB' ICR, Outlook Stable ------------------------------------------------------ S&P Global Ratings affirmed its 'BB' issuer credit rating and all its other ratings on Hughes Satellite Systems Corp. The stable outlook reflects S&P's view that although subscriber losses and higher customer acquisition costs will contribute to lower earnings this year, S&P Global Ratings-adjusted gross leverage will remain consistent for the rating, in the mid- to high-2x area, over the next two years, absent leveraging acquisitions. S&P's threshold revisions reflect longer-term competitive headwinds in consumer satellite broadband, which contribute to its weaker view of the business. Hughes maintains a large share of the U.S. consumer satellite broadband market, which is becoming increasingly competitive because of the emergence of low earth orbit-based operators such as SpaceX Starlink and the wider availability of fixed wireless access (FWA). Hughes lost 234,000 consumer broadband subscribers in 2022, sharply lower than its forecast for losses in the 80,000-90,000 range. Although this was partly the result of network capacity constraints in North America, it also reflects the rapid growth of Starlink, which added about 400,000 domestic customers in 2022. Substantial growth in FWA subscribers in the broadband industry was also a contributing factor, although to a lesser extent. S&P expects subscriber losses will moderate significantly once Jupiter-3, which is expected to double its fleet capacity, comes online. However, Hughes' ability to sustain subscriber growth longer term is less certain given intensifying competition. In December 2022, Starlink received U.S. Federal Communications Commission approval to launch up to an additional 7,500 satellites as part of its plans to increase capacity and expand its broadband service nationwide. Meanwhile, Amazon has plans to launch its first low earth orbit satellites in 2024, also targeting consumer broadband. In addition, federally subsidized terrestrial fiber builds in rural markets under the $42.5 billion Broadband, Equity, Access, and Deployment Program will likely shrink the addressable market significantly (estimated at about 10 million-15 million homes) for Hughes and other satellite internet players given the speed, reliability, and cost advantages of fiber-based technology that will likely be deployed. S&P said, "We forecast broadband subscriber losses in the 140,000-150,000 range this year, with much of the improvement in the back half as Jupiter-3 becomes operational, which we expect in the third quarter. At the same time, we expect the resulting decline in service revenue will be partially offset by modest growth in average revenue per user (ARPU) and enterprise equipment sales. For 2023, we forecast total revenue will decline 4%-6% while EBITDA falls in the mid-teens percent area due to higher customer retention costs and increased sales and marketing expense. As such, we expect leverage will increase to the high-2x area in 2023 from 2.3x in 2022, but remain below our 3x downgrade threshold in the next few years, absent leveraging acquisitions." Management has identified a new strategy for growth. Given the challenges it faces in consumer broadband, Hughes is prioritizing the expansion of its enterprise business. Its strong growth in 2022 mostly reflected the company's equipment revenue increase of 31.5%. Despite the strong results in enterprise, most of the growth reflects sales of manufactured equipment, which is project-based and subject to cyclical variations. Still, Hughes has solid momentum in enterprise with a contracted revenue backlog totaling $1.5 billion as of Dec. 31, 2022. In addition, we believe Hughes has a longer-term opportunity to monetize its S-band spectrum licenses. The company has indicated that it will not be developing another geostationary satellite, instead focusing its resources on diversifying its products including through the development of its S-band spectrum. We believe this decision is prudent given the potential for an imbalance between supply and demand industry-wide. This lack of capital investment required for a next generation GEO satellite will preserve cash flow generation and financial flexibility over the next 2-3 years. To that end, the company recently announced an agreement with Astro Digital for the construction of 28 S-band mobile satellites. Hughes expects the first phase to offer global internet of things (IoT) networking beginning in 2024, with longer-term plans to develop a hybrid carrier and satellite 5G network on smartphones by 2026. S&P said, "While we do not anticipate significant upfront costs associated with the IoT network, we believe significant capital spending could be required to develop the direct-to-smartphone service. At the same time, we do not incorporate incremental revenue into our base-case forecast from these initiatives given uncertainty around demand and revenue potential." S&P said, "We expect material pressure on margins in 2023. While we expect subscriber declines to continue at a similar pace through at least the first half, EBITDA margins will be lower in the low-30% area because of the shift in revenue mix to lower margin equipment revenue. This also reflects our expectation for higher operating expenses to market and sell Hughes' broadband product to new customers. However, once the company begins to fill Jupiter-3, we expect margins to rebound somewhat as there is a high level of operating leverage in the business. "Hughes' sizable cash balance provides financial flexibility. We believe the most likely use of cash would be for an acquisition or strategic partnership outside the traditional satellite industry given Hughes' intention to diversify the business. Also, controlling shareholder Charlie Ergen could use Hughes as a strategic and financial partner in his vision for a terrestrial wireless network at Dish Network (which he also controls), as there are potential wireless synergies. However, even in a hypothetical situation for which Mr. Ergen uses Hughes' cash to fund his Dish project, we are unlikely to change our rating on Hughes. We no longer net cash from our debt calculation because of our weaker assessment of the business, therefore Hughes' gross leverage will not be affected by changes to its cash balance." The stable outlook reflects S&P's view that although subscriber losses and higher customer acquisition costs will contribute to lower earnings this year, S&P Global Ratings-adjusted gross leverage will remain consistent for the rating, in the mid- to high-2x area, over the next two years, absent leveraging acquisitions. S&P could lower the rating if: -- Hughes' operating performance weakened materially due to the combination of a shrinking U.S. addressable market and heightened competition; or -- The company pursued larger acquisitions that raised leverage above 3x on a sustained basis. While unlikely over the next 12 months, S&P could raise the rating if the company: -- Committed to maintain leverage below 2x on a sustained basis, including acquisitions and/or other strategic initiatives; and -- Significantly increased gross customer additions and had a credible path toward sustaining healthy profitability with EBITDA margins above 35%. ESG credit indicators: E-2, S-2, G-3 S&P said, "Governance factors are a moderately negative consideration in our credit analysis of Hughes. The company's controlling shareholder, Mr. Ergen, also controls Dish Network. This exposes both to governance risks. Hughes sold assets to Dish, a loss of about $275 million in predictable EBITDA in 2019. EchoStar shareholders received an increased equity stake in Dish, but creditors were moderately harmed. Dish needs at least $10 billion to build its wireless network. Given Hughes' large cash balance and potential wireless synergies, we believe Mr. Ergen could use Hughes as a strategic and financial partner in his vision for a terrestrial wireless network Dish." INSYS THERAPEUTICS: Ex-Directors Agree to $175M Opioid-Sale Deal ---------------------------------------------------------------- Jef Feeley of Bloomberg News reports that some former directors of Insys Therapeutics Inc. have agreed to a potential $175 million settlement of claims they failed to properly oversee salespeople who illegally marketed the company's opioid painkiller, which led to the jailing of top executives. The accord -- which will be partially paid by directors themselves -- resolves allegations that four board members turned a blind eye to bribes paid to doctors who prescribed the company's fentanyl-based spray, Subsys, to rack up massive profits. Former Insys Chairman and Chief Executive Officer John Kapoor is not party to the settlement. About Insys Therapeutics Headquartered in Chandler, Ariz., Insys Therapeutics Inc. -- http://www.insysrx.com/-- is a specialty pharmaceutical company that develops and commercializes innovative drugs and novel drug delivery systems of therapeutic molecules that improve patients' quality of life. Using proprietary spray technology and capabilities to develop pharmaceutical cannabinoids, Insys is developing a pipeline of products intended to address unmet medical needs and the clinical shortcomings of existing commercial products. Insys is committed to developing medications for potentially treating anaphylaxis, epilepsy, Prader-Willi syndrome, opioid addiction and overdose, and other disease areas with a significant unmet need. As of March 31, 2019, Insys had $172.6 million in total assets, $336.3 million in total liabilities, and a total stockholders' deficit of $163.7 million. Insys Therapeutics and six affiliated companies filed petitions seeking relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 19-11292) on June 10, 2019. The Debtors' cases are assigned to Judge Kevin Gross. The Debtors tapped Weil, Gotshal & Manges LLP and Richards, Layton & Finger, P.A., as legal counsel; Lazard Freres & Co. LLC as investment banker; FTI Consulting, Inc. as financial advisor; and Epiq Corporate Restructuring, LLC as claims agent. Andrew Vara, acting U.S. trustee for Region 3, on June 20, 2019, appointed nine creditors to serve on an official committee of unsecured creditors in the Chapter 11 cases. Akin Gump Strauss Hauer & Feld LLP, and Bayard, P.A., serve as the Committee's attorneys; and Province, Inc., is the financial advisor. * * * Insys sold its epinephrine 7mg and 8.5mg unit-dose nasal spray products and naloxone 8mg unit-dose nasal spray products and certain equipment and liabilities to Hikma Pharmaceuticals USA Inc. for $17 million. It sold for $12.2 million to Chilion Group Holdings US, Inc., its (i) CBD formulations across current pre-clinical, clinical, third-party grants and investigator initiated study activities (including any future activities or indications), (ii) THC programs of Syndros oral dronabinol solution, and (iii) Buprenorphine products. Insys sold to BTcP Pharma, LLC for $52 million in royalty payments plus other amounts all strengths, doses and formulations in the world (except for the Republic of Korea, et al.). Insys sold to Pharmbio Korea, Inc., for $1.2 million in cash specific intellectual property, records and certain other assets related to strengths, doses and formulations of the Subsys Product in the Republic of Korea, Japan, China, Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Timor-Leste, and Vietnam. After selling substantially all of their assets, the Debtors filed a Chapter 11 Plan and Disclosure Statement. Judge Kevin Gross on Jan. 16, 2020, confirmed the Debtors' Plan of Liquidation. JANUS INTERNATIONAL: Moody's Ups CFR & Sr. Secured Term Loan to B1 ------------------------------------------------------------------ Moody's Investors Service upgraded Janus International Group, LLC's Corporate Family Rating to B1 form B2 and its Probability of Default Rating to B1-PD from B2-PD. Moody's also upgraded the company's senior secured term loan to B1 from B2. The company's speculative grade liquidity rating remains SGL-2. The outlook is stable. The upgrade of Janus' CFR to B1 from B2 results from Moody's expectation that Janus will continue to perform well and maintain low leverage, with adjusted debt-to-EBITDA sustained below 3x over the next two years. In addition, the company has remediated two of the four material weaknesses in its internal controls previously identified since its initial public offering in June 2021. "Janus is well positioned to contend with decelerating growth in the US economy," according to Peter Doyle, a Moody's VP-Senior Analyst. The following ratings are affected by the action: Upgrades: Issuer: Janus International Group, LLC Corporate Family Rating, Upgraded to B1 from B2 Probability of Default Rating, Upgraded to B1-PD from B2-PD Senior Secured 1st Lien Bank Credit Facility, Upgraded to B1 (LGD4) from B2 (LGD4) Outlook Actions: Issuer: Janus International Group, LLC Outlook, Remains Stable RATINGS RATIONALE Janus' B1 CFR incorporates ownership concentration. Mr. Feliciano, Chairman of Janus' Board of Directors, through the private-equity firm Clearlake Capital Group, L.P. (Clearlake) of which Mr. Feliciano is a Managing Partner and Co-Founder, owns 35.5% of Janus and will influence business decisions, including long-term deployment of cash and capital. This private-equity ownership is now a material rating constraint. Janus is a small company in terms of revenue, limiting the amount of earnings it can generate and resulting cash flow to service its debt service and lease payments of about $70 million per year. Further, Janus still has ongoing material weaknesses, which will take time to test and certify by the company's auditors. The two remaining material weaknesses include information technology controls and controls over the review of different sources of revenue. Management indicates that these deficiencies did not result in any material misstatement of its financial statements. Moody's believes that these material weaknesses will be rectified over the next twelve months with minimal impact to its financial results. Robust operating performance is a credit strength, providing a major offset to the company's small revenue base. Moody's projects adjusted EBITDA in the run-rate range of 23% - 24% over the next two years. Janus is the market leader in the construction and remodeling of self-storage units. Moody's views the self-storage markets for both consumer and commercial needs as relatively recession proof, helping to reduce earnings volatility. Janus' SGL-2 Speculative Grade Liquidity Rating reflects Moody's view that the company will maintain a good liquidity profile though 2024, generating at least $75 million of free cash flow in each of the next two years. Janus has access to an $80 million asset based revolving credit facility maturing mid-2024, which will be easily extended. The stable outlook reflects Moody's expectation that Janus will continue to perform well and maintain at least its good liquidity profile. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS An upgrade of Janus' ratings could ensue if end markets remain supportive of organic growth such that adjusted debt-to-EBITDA is below 3.5x. Upwards rating movement also requires preservation of at least good liquidity and remediation of all material weaknesses and strengthening of internal controls. Reduction in private-equity ownership and influence would support further a higher rating. A downgrade could occur if Janus' adjusted debt-to-EBITDA is above 4.5x. Negative ratings pressure may also occur if the company experiences a weakening of liquidity or adopts aggressive acquisition or financial policies. The principal methodology used in these ratings was Manufacturing published in September 2021. Janus International Group, LLC, headquartered in Temple, Georgia, is a manufacturer and supplier of turn-key self-storage, commercial and industrial building solutions, and facility and door automation technologies. JPW INDUSTRIES: S&P Downgrades ICR to 'CCC+' on Refinancing Risk ---------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on La Vergne, Tenn.-based JPW Industries Lux Acquisitions Holdings S.a.r.l. (JPW Industries) to 'CCC+' from 'B'. S&P also lowered its issue-level rating on the company's senior secured notes to 'CCC+' from 'B'. The '4' recovery rating remains unchanged. The negative outlook reflects the potential for another downgrade if S&P does not believe that the company can successfully refinance its upcoming maturities in a manner it would not view as tantamount to a default before its senior secured notes become current. JPW Industries' $280 million senior secured notes are due on Oct. 1, 2024, and will become current in October of 2023. In addition, the company's asset-based lending (ABL) revolving credit facility is due in 2027, but it contains a springing maturity feature 91 days before the maturity of its senior secured notes, if the notes are not refinanced. The current state of the high-yield credit markets will make it more difficult for JPW Industries to refinance its senior secured notes. Recent turmoil in the U.S. banking industry and continued macroeconomic uncertainty has made it more difficult for many companies with upcoming debt maturities to seek refinancing, especially in the high-yield markets. With the October 2024 maturity of JPW Industries' senior secured notes fast approaching, there is significant refinancing risk. While S&P expects the company will continue to improve its operating performance, we note that elevated levels of leverage and weaker cash generation on a last 12-month (LTM) basis could make its prospects less favorable at this time. Our rating action also takes into consideration that the ABL's springing provision will cause the credit facility to become current 91 days prior to the notes and adds additional pressure to liquidity. JPW Industries has remained diligent in its financial policy over the past several years; however, the longer the company waits to refinance the notes, the greater the risk that capital market conditions will weaken further, limiting the company's options and putting more pressure on a successful refinancing. JPW Industries will likely face demand pressure in 2023 amid a softening macroeconomic environment. For the period ended Dec. 31, 2022, JPW reported full-year revenue growth of 4.8% as a result of price increases, changes in its product mix, and sales through its e-commerce channel. However, total product volume sales decreased close to 10% in 2022 despite selling higher-price inventory. S&P said, "Although inflationary pressures seem to have abated, we expect the lower volume trends to continue through at least the first half of 2023 as customers curb capital spending in anticipation of a softening environment. As a result, we forecast a low- to mid-single-digit percent organic revenue decline in 2023." This decline is partially offset by the roll off of lower volumes incurred after the company had issues implementing an upgraded enterprise resource planning (ERP) system in the third quarter of 2022. S&P said, "We expect a full year run rate of higher prices will improve JPW Industries' margin profile and cash generation. The company ended 2022 with S&P Global Ratings-adjusted margins about 130 basis points (bps) lower than 2021 and nearly 400 bps lower than its 2020 high. Like many other capital goods peers, JPW Industries' material costs rose rapidly in late 2021 and early 2022. While the company took counteractive measures to combat inflation, the lag in pricing lowered gross margins through the first half of the year. We believe these pricing actions will continue to benefit margins in 2023 despite our expectations for demand. Significant supply chain disruptions also impaired the company's ability to generate free operating cash flow (FOCF) in 2022, causing higher draws on its ABL and thus increasing its leverage. We believe this trend will reverse in 2023 as the company prioritizes cash collections and remains diligent in its inventory. However, higher floating rates could pressure cash flows given the company's reliance on its credit facility to fund intrayear operations. Given the improvements in margins and expectations for lower borrowings on the ABL, we expect leverage to improve in 2023, although it will likely remain elevated. "The negative outlook reflects the potential for another downgrade if we do not believe that the company can successfully refinance its upcoming maturities in a manner we would not view as tantamount to a default before its senior secured notes become current." S&P could lower its ratings on JPW Industries if: -- The company cannot successfully address its upcoming debt maturities prior to 12 months before its senior secured notes are due; -- The company announces a debt exchange or restructuring that implies lenders will receive less value than promised when the original debt was issued; or, -- S&P envisions a liquidity deficit or covenant pressure. S&P could revise its outlook to stable or raise its ratings on JPW Industries if: -- The company addresses its upcoming debt maturities through a refinancing or maturity extension such that S&P would not consider it a distressed exchange or restructuring; and -- The company meets S&P's expectations for operating performance while generating positive FOCF and maintaining adequate liquidity. ESG credit indicators:E-2, S-2, G-3 S&P said, "Governance factors are a moderately negative consideration in our credit rating analysis of JPW Industries, as is the case for most rated entities owned by private-equity sponsors. We believe the company's highly leveraged financial risk profile points to corporate decision-making that prioritizes the interests of the controlling owners. This also reflects the generally finite holding periods and a focus on maximizing shareholder returns." KOSSOFF PLLC: Trustee Eyes Tenantracers' $2-Mil. Rent Bills ----------------------------------------------------------- The Chapter 7 trustee parsing the trail of funds rerouted from now-defunct law firm Kossoff PLLC by the principal, since incarcerated for stealing escrow funds, has asked a New York bankruptcy court to claw back $2 million routed for unrelated rental payments. Albert Togut, as the Chapter 7 Trustee of the estate of Kossoff PLLC, filed a complaint against Columbus Properties, Inc., and Colonnade Management, Corp. Prior to being disbarred and sent to prison on May 6, 2022 for stealing millions of dollars from the Debtor and dozens of the Debtor's clients, Kossoff was a prominent real-estate attorney in New York City and he served as the sole managing member of the Debtor. Additionally, at all times relevant to this Complaint, Kossoff was an officer, director, equity interest holder and creditor of Tenantracers, LLC, a now-defunct residential tenant surveillance service founded by Kossoff. The Debtor and Tenantracers are, and always were, separate business entities. For over two decades prior to the Petition Date, Tenantracers and Kossoff's law firms were tenants in various office suites located at 217 Broadway in New York City -- a building owned by Defendants ("217 Broadway"). The Debtor, with offices on the fourth floor of 217 Broadway, and Tenantracers with offices primarily on the third floor and then the fifth floor of 217 Broadway, never occupied the same office suite in 217 Broadway, nor were they ever co-tenants under any lease with Defendants. However, the Debtor's books and records disclose that for years prior to the Petition Date, Kossoff improperly used funds in the Debtor's bank accounts to pay Tenantracers' obligations to Defendants. Accoridng to Togut, the Debtor's payments to and for the benefit of Defendants were fraudulent, and they should be avoided and recovered by the Trustee. The Avoidable Payments made to and for the benefit of Defendants, which total not less than $2,065,444, neither conferred a benefit to the Debtor nor advanced any legitimate business purpose for the Debtor. About Kossoff PLLC Kossoff PLLC is a real estate law firm based in New York City. It operated as a law firm with offices located at 217 Broadway in New York City. The firm held itself out as a law firm that provided full-service real estate legal services specializing in litigation and transactional matters, including leasing, sale and acquisition of real property, commercial landlord tenant matters, real estate litigation, and city, state and federal agency regulatory matters. Mitchell H. Kossoff, the firm's founder and only known managing member, is alleged to have failed to and/or refused to return millions of dollars of client funds when requested by clients. Kossoff PLLC is subject to an involuntary petition for Chapter 7 bankruptcy (Bankr. S.D.N.Y. Case No. 21-10699) by creditors on April 13, 2021. The case is handled by Honorable Judge David S. Jones. Gran Sabana Corp NV, Louis & Jeanmarie Giordano, and other former clients of the Debtor signed the involuntary petition. Carter Ledyard & Milburn LLP, led by Aaron R. Cahn, represents the petitioners. Veteran restructuring lawyer Albert Togut of Togut, Segal & Segal LLP, was named as Chapter 7 Trustee. He tapped his own firm as counsel in the case. LARRET PROPERTIES: Taps Chad M. Garland CPA as Accountant --------------------------------------------------------- Larret Properties Unlimited, LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the Western District of Louisiana to employ Chad M. Garland, CPA, LLC to prepare tax returns and related materials. The firm will be paid at these rates: Chad M. Garland $325 per hour Staff CPA-Forensic $150 to $275 per hour Administration $50 per hour Deposition Fee $1,650 per half day Court Appearance $1,650 per half day Chad Garland, CPA, a partner at Chad M. Garland, CPA, LLC, 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: Chad M. Garland, CPA Chad M. Garland, CPA, LLC 900 Pierremont Road, Suite 120 Shreveport, LA 71106 Tel: (318)-220-4416 Fax: (318) 670-7842 About Larret Properties Unlimited Larret Properties Unlimited, LLC, and its affiliates, Terral Construction, LLC and D'Arbonne Construction Company, Inc., filed voluntary petitions for Chapter 11 protection (Bankr. W.D. La. Lead Case No. 23-30074) on Jan. 24, 2023. Thomas R. Willson has been appointed as Subchapter V trustee. At the time of the filing, Larret reported $1,005,000 in assets and $1,003,287 in liabilities. Judge John S. Hodge oversees the cases. The Debtors tapped Bradley L. Drell, Esq., at Gold Weems Bruser Sues & Rundell, APLC as legal counsel and Chad M. Garland, CPA, LLC as accountant. LEGACY CARES: Taps Miller Buckfire as it Plans Bankruptcy Filing ---------------------------------------------------------------- Soma BiswasFollow and Heather Gillers of Bloomberg Law report that Arizona sports complex developer, Legacy Cares, has hired Miller Buckfire to explore debt restructuring options for the complex formerly named Bell Bank Park. The big Mesa, Ariz., sports complex that opened last 2022 as Bell Bank Park is working on a debt restructuring and reviewing options including a bankruptcy filing after revenue fell short of projections and the complex defaulted on its tax-exempt municipal debt last 2022, according to people familiar with the matter. The 320-acre sports complex has hired investment bank Miller Buckfire & Co. and replaced Legacy Sports USA, the manager of the money-losing facility, according to a regulatory filing posted Tuesday, April 11, 2023, to Electronic Municipal Market Access. About Legacy Cares Legacy Cares is a nonprofit developer that provides quality mental health and substance abuse counseling for people living with HIV/AIDS including LGBTQ, straight, and transgender clients. LIFE CARE: Fitch Alters Outlook on 'BB+' IDR to Negative -------------------------------------------------------- Fitch Ratings has affirmed the 'BB+' rating on approximately $84 million of series 2021A fixed rate revenue bonds issued by the St. Johns County (FL) Industrial Development Authority on behalf of Life Care Ponte Vedra (dba Vicar's Landing; VL). Fitch has also affirmed VL's Issuer Default Rating (IDR) at 'BB+'. The Rating Outlook has been revised to Negative from Stable. Entity/Debt Rating Prior ----------- ------ ----- Life Care Ponte Vedra, Inc. (FL) LT IDR BB+ Affirmed BB+ Life Care Ponte Vedra, Inc. (FL) /General Revenues/1 LT LT BB+ Affirmed BB+ SECURITY The series 2021A bonds are secured by a revenue pledge of the obligated group (OG). The OG consists of the existing VL Sawgrass campus, the Oak Bridge expansion campus, and the VL Foundation. ANALYTICAL CONCLUSION The Negative Outlook reflects a 21% drop in unrestricted liquidity in FY22. While the decline was driven largely by unrealized losses on investments, VL has limited financial cushion at the current rating level. In addition, VL is in a period of heightened execution risk as fill up for phase 1 of the Oak Bridge project continues, the associated short-term debt is paid off by the end of 1Q23, and construction and pre-sales move forward for phase 2 of Oak Bridge. At the end of February 2023, about 90% of the 109 phase 1 Oak Bridge independent living (IL) units were either filled (66) or had a 10% deposit (32). The affirmation reflects VL's operating performance -- VL had a 96.6% operating ratio in FY22, which is good for a Type 'A' contract -- as well as the positive trajectory of fill up for the Oak Bridge expansion, which is reflective of VL's strong demand profile. Fitch expects V's operations to improve in the next few years with the benefit of the additional Oak Bridge IL revenues. However, despite the operating performance, VL will need to grow its balance sheet for VL's financial profile to be more consistent with the current rating level. Separately, VL is contemplating moving forward on a third phase of Oak Bridge. VL has limited debt capacity at the current rating. There could be negative rating pressure, but that will depend on the scope, timing, and financing of a third phase, and VL's financial profile at that time. Fitch does not expect the financing to happen in the next year. KEY RATING DRIVERS Revenue Defensibility: 'a' High-End LPC in a Quality Service Area The strong revenue defensibility reflects VL's market position as a high-end Type 'A' life plan community (LPC) in an advantageous location adjacent to TPC Sawgrass golf course in Ponte Vedra Beach, FL. IL occupancy ranged from 95% to 98% over the four years leading up FY22, when the 109 Oak Bridge units began coming online. At the end of February 2023, IL occupancy at Sawgrass, the original campus, was 91%, and occupancy in Oak Bridge was 66%. Consistent with the sector, VL's assisted living and skilled nursing occupancy dropped over the last two years but recovered in 2022 ending the year at 78% and 70%, respectively, after ending 2021 at 61% and 52%. The strong revenue defensibility also reflects the good service area; Ponte Vedra is one of the wealthiest communities in the Jacksonville area, with most of VL's residents coming from the local community. Property values are above average and growing. While competition is present in the broader region, it is somewhat limited in the immediate service area. Operating Risk: 'bbb' Solid Operations; Ongoing Capex; Capital Ratios Stressed VL's midrange operating risk assessment is supported by a history of strong operating margins balanced by the significant capital spending and associated debt. Over the last five years, the operating ratio, averaged 90% and the net operating margin - adjusted (NOMA) averaged approximately 23%. For FY23, revenue growth is expected to be over 40% given the additional revenues from the Oak Bridge expansion units. The phase 1 IL units increased VLs IL units to 336 from 227, and the number of IL units will increase by another 38 units in phase 2. Fitch expects VL to continue to generate good operating metrics in the coming years given the additional IL revenue and the moderate operating costs related to adding additional IL units. VL's average age of plant measured a favorably low 7.3 years at fiscal year-end (FYE) 2022 and capex as a percentage of depreciation averaged 372% over the last four years. Capital spending will continue to be elevated for phase 2 of Oak Bridge, which includes the building of 33 additional IL units. Phase 2 is being financed by a drawn down bank loan and an equity contribution. The drawn down bank loan will be paid back by the phase 2 entrance fee pool and entrance fees from the Phase I expansion. Phase 2 is expected to cost about $33 million. VL also plans to move forward on a five cottage expansion, with the entrance fee pool for the cottages repaying VL for the cost of the cottage construction. VL's capital-related metrics are stressed, but Fitch expects the metrics to moderate to levels more consistent with the midrange operating risk assessment as the phases of the Oak Bridge expansion fill and occupancy in the new units stabilizes. MADS of $7 million, which will not be tested until 2025 and includes a yearly ground lease payment, represented a very high 26% of revenue in fiscal 2022. Financial Profile: 'bb' Thin Financial Profile Through a Moderate Stress At YE 2022, VL had unrestricted cash-to-adjusted debt of about 16% and annual debt service coverage of 2.1x (as calculated by Fitch). The cash to adjusted debt is very light for the rating level. Total adjusted long term debt of $169.9 million, includes about $46 million in short term debt and $42.2 million in capitalized leases (mostly for a ground lease for the campus property). Fitch's baseline scenario, which is a reasonable forward look of financial performance over the next five years, given current economic expectations, and includes a portfolio sensitivity customized to VL's asset allocation, shows operations remaining strong helped by the additional Oak Bridge revenues, offset by a thin financial profile. The base case includes the payoff of the short-term debt, as well as additional drawdowns and pay back of a bank loan financing phase 2 of Oak Bridge. Capital spending will be above depreciation over the next three years. The forward look does not incorporate a potential third phase of Oak Bridge. The stress case scenario shows cash to adjusted debt not recovering to levels consistent with the rating and that supports the negative outlook and the need for VL to execute on its stated budget in FY23. Asymmetric Additional Risk Considerations There are no asymmetric risk considerations associated with VL's rating. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: - Unrestricted liquidity failing to improve in FY23 such that cash to adjusted debt is not expected to improve to above 20%; - Weaker operating performance, such that debt service coverage is consistently under 1.4x; - Unexpected challenges executing phase 2I of the Oak Bridge project leading to delays and/or cost overruns; - Slower than expected fill up on the remaining phase 1 Oak Bridge expansion units. Factors that could, individually or collectively, lead to positive rating action/upgrade: - An Outlook revision back to Stable will require growth in unrestricted liquidity such that cash to adjusted debt stabilizes over 20% through Fitch's forward look, inclusive of potential debt for the phase three of Oak Bridge; - Longer term, good cash flow leading to growth in unrestricted liquidity, such that cash to adjusted debt stabilizes at or above 50%. CREDIT PROFILE VL is a Type 'A' LPC consisting of 336 ILUs, 38 private assisted living units (ALU), and a 60-bed skilled nursing facility. The community is located in Ponte Vedra Beach, FL, approximately 25 miles southeast of downtown Jacksonville. Historically, most residents had been on refundable entrance fee contracts, but VL has been transitioning to non-refundable contracts, and its associated refundable entrance fee liability has declined. VL recorded approximately $27 million in total operating revenue in fiscal 2022. The sole corporate member of VL is Life Care Pastoral Services (LCPS). There are no cross-obligations between VL and LCPS. 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. LSF11 TRINITY: Moody's Assigns First Time 'B2' Corp. Family Rating ------------------------------------------------------------------ Moody's Investors Service assigned first-time ratings to LSF11 Trinity Bidco, Inc. including a B2 corporate family rating and a B2-PD probability of default rating. Moody's also assigned a B2 rating to the company's proposed senior secured first lien credit facilities, comprising a $125 million revolving credit facility and a $675 million term loan. The outlook is stable. Proceeds from the term loan and new equity will be used to finance the purchase of Titan Acquisition Holdings, LP, the parent of MHI Holdings, LLC ("MHI") (B2 stable) by private equity firm Lone Star Funds. "The assignment of the B2 CFR reflects Moody's expectation for high financial leverage, adequate liquidity, and aggressive financial policies over the next 12-18 months, mitigated in part by the business' good revenue visibility and high barriers to entry," commented Safat Hannana, a Moody's Assistant Vice President and Analyst. Assignments: Issuer: LSF11 Trinity Bidco, Inc. Corporate Family Rating, Assigned B2 Probability of Default Rating, Assigned B2-PD Senior Secured 1st Lien Term Loan, Assigned B2 (LGD4) Senior Secured 1st Lien Revolving Credit Facility, Assigned B2 (LGD4) Outlook Actions: Issuer: LSF11 Trinity Bidco, Inc. Outlook, Assigned Stable RATINGS RATIONALE The B2 CFR is constrained by the company's volatile revenue, high financial leverage and private equity ownership, a governance consideration. Revenue declined in 2022 because of timing differences between the conclusion and commencement of large repair service projects. Moody's pro forma adjusted debt/EBITDA will be approximately 5.7x as of December 31, 2022. Moody's anticipates the use of aggressive financial policies by the company's new owners, but expects the management team and strategic initiatives to generally remain intact. The ratings also reflect the company's solid market position as a provider of ship maintenance, repair and operations, or MRO, services to the US Navy. More than 60% of the company's revenue comes from US Navy. The company is well positioned on the west coast as US defense priorities shift to the Pacific region. The company will also benefit from the US Navy's plan to increase the size of its fleet to approximately 355 ships from 300 ships by 2030. Navy ship repair projects take 12-18 months and are non-deferrable, providing good revenue visibility. There are also high barriers to entry because of how difficult it is to build new dry docks. Liquidity is adequate. Cash on hand will be $25 million following a dividend to the seller at the time of the transaction. Moody's expects the company will generate positive free cash flow with minimal maintenance capital expenditures and no dividends in the near term. The proposed $125 million revolving credit facility will be undrawn at close. The stable outlook reflects Moody's expectation of positive free cash flow and maintenance of adequate liquidity over the next 12-18 months despite rising costs. The company's Credit Impact Score is highly negative (CIS-4). This reflects the negative credit impact relating to its high exposure to governance risk (e.g., financial strategy and risk management and board structure and policies). FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if the company sustains positive free cash flow while adjusted debt/EBITDA is sustained below 4.5x. The adoption of more conservative financial policies and achieving greater scale without diluting profit margins could also be supportive of an upgrade. The ratings could be downgraded if liquidity weakens, poorly executed fixed price contracts result in cost overruns, or adjusted debt/EBITDA is sustained above 6.0x. As proposed, the new credit facilities are expected to provide covenant flexibility that if utilized could negatively impact creditors. Notable terms include the following: Incremental debt capacity up to the greater of greater of $160 million and 100% of Consolidated EBITDA, plus unlimited amounts subject to 4.50x First Lien Net Leverage Ratio (if pari passu secured). Amounts up to the greater of $80 million and 50% of Consolidated EBITDA may be incurred with an earlier maturity date than the initial term loans. The credit agreement permits the transfer of assets to unrestricted subsidiaries, up to the carve-out capacities, subject to "blocker" provisions which: (i) prohibit the transfer of material intellectual property to unrestricted subsidiaries; (ii) prohibit the designation of a restricted subsidiary, which owns any material intellectual property (including any exclusive license or other exclusive rights to such material intellectual property), as an unrestricted subsidiary; (iii) provides that no unrestricted subsidiary may own, at any time, or hold any exclusive license or any other exclusive rights to material intellectual property. Non-wholly-owned subsidiaries are not required to provide guarantees; dividends or transfers resulting in partial ownership of subsidiary guarantors could jeopardize guarantees subject to protective provisions which only permit guarantee releases if subsidiary guarantors cease to be wholly-owned as the result of a sale or disposition for a bona fide business purpose (as determined by the company in good faith). The credit agreement provides some limitations on up-tiering transactions, including the requirement that each lender directly affected must consent to the subordination of any of the obligations to any other indebtedness or the subordination of any liens securing the obligations on all or substantially all of the collateral to any other liens securing other indebtedness, other than DIP facilities, permitted senior debt, or any exchanged debt so long as all lenders have been offered a bona fide opportunity to ratably participate in such indebtedness. The proposed terms and the final terms of the credit agreement may be materially different. LSF11 Trinity Bidco, Inc. provides ship repair, marine and non-marine fabrication services in support of the aerospace, defense and infrastructure end markets, serving a range of government and commercial customers. The company generated $993 million of revenue in 2022. The principal methodology used in these ratings was Aerospace and Defense published in October 2021. LTL MANAGEMENT: April 27 Deadline Set for Panel Questionnaires -------------------------------------------------------------- The United States Trustee is soliciting members for committee of unsecured creditors in the bankruptcy case of LTL Management, LLC. If a party wishes to be considered for membership on any official committee that is appointed, it must complete a questionnaire available at https://bit.ly/3Lkq1YJ and return by email it to Tina L. Oppelt -- Tina.L.Oppelt@usdoj.gov , and Neidy Fuentes -- Neidy.Fuentes@usdoj.gov -- at the Office of the United States Trustee so that it is received no later than 1:00 p.m., on April 27, 2023. If the U.S. Trustee receives sufficient creditor interest in the solicitation, it may schedule a meeting or telephone conference for the purpose of forming a committee. About LTL Management LTL Management, LLC, is a subsidiary of Johnson & Johnson (J&J), which was formed to manage and defend thousands of talc-related claims and oversee the operations of Royalty A&M. Royalty A&M owns a portfolio of royalty revenue streams, including royalty revenue streams based on third-party sales of LACTAID, MYLANTA/MYLICON and ROGAINE products. LTL Management filed a petition for Chapter 11 protection (Bankr. W.D.N.C. Case No. 21-30589) on Oct. 14, 2021. The case was transferred to New Jersey (Bankr. D.N.J. Case No. 21-30589) on Nov. 16, 2021. The Hon. Michael B. Kaplan is the case judge. At the time of the filing, the Debtor was estimated to have $1 billion to $10 billion in both assets and liabilities. The Debtor tapped Jones Day and Rayburn Cooper & Durham, P.A., as bankruptcy counsel; King & Spalding, LLP and Shook, Hardy & Bacon LLP as special counsel; McCarter & English, LLP as litigation consultant; Bates White, LLC as financial consultant; and AlixPartners, LLP as restructuring advisor. Epiq Corporate Restructuring, LLC, is the claims agent. An official committee of talc claimants was formed in the Debtor's Chapter 11 case on Nov. 9, 2021. On Dec. 24, 2021, the U.S. Trustee for Regions 3 and 9 reconstituted the talc claimants' committee and appointed two separate committees: (i) the official committee of talc claimants I, which represents ovarian cancer claimants, and (ii) the official committee of talc claimants II, which represents mesothelioma claimants. The official committee of talc claimants I tapped Genova Burns LLC, Brown Rudnick LLP, Otterbourg PC and Parkins Lee & Rubio LLP as its legal counsel. Meanwhile, the official committee of talc claimants II is represented by the law firms of Cooley LLP, Bailey Glasser LLP, Waldrep Wall Babcock & Bailey PLLC, Massey & Gail LLP, and Sherman Silverstein Kohl Rose & Podolsky P.A. Re-Filing of Chapter 11 Petition On January 30, 2023, a panel of the Third Circuit issued an opinion directing this Court to dismiss the 2021 Chapter 11 Case on the basis that it was not filed in good faith. Although the Third Circuit panel recognized that the Debtor "inherited massive liabilities" and faced "thousands" of future claims, it concluded that the Debtor was not in financial distress before the filing. On March 22, 2023, the Third Circuit entered an order denying the Debtor's petition for rehearing. The Third Circuit entered an order denying LTL's stay motion on March 31, 2023, and, on the dame day, issued its mandate directing the Bankruptcy Court to dismiss the 2021 Chapter 11 Case. The Bankruptcy Court entered an order dismissing the 2021 Case on April 4, 2023. Johnson & Johnson on April 4, 2023, announced that its subsidiary LTL Management LLC (LTL) has re-filed for voluntary Chapter 11 bankruptcy protection (Bankr. D.N.J. Case No. 23-12825) to obtain approval of a reorganization plan that will equitably and efficiently resolve all claims arising from cosmetic talc litigation against the Company and its affiliates in North America. In the new filing, J&J said it has agreed to contribute up to a present value of $8.9 billion, payable over 25 years, to resolve all the current and future talc claims, which is an increase of $6.9 billion over the $2 billion previously committed in connection with LTL's initial bankruptcy filing in October 2021. LTL also has secured commitments from over 60,000 current claimants to support a global resolution on these terms. LTL MANAGEMENT: Plaintiffs Attys. Form Committee to Back $8.9B Deal ------------------------------------------------------------------- Lawyers representing approximately 55,000 plaintiffs in the litigation against Johnson & Johnson (NYSE: JNJ) over its cancer-causing talcum powder products have formed an Ad Hoc Committee to support an $8.9 billion deal that would end a decade-long legal battle against the pharmaceutical giant. J&J subsidiary, LTL Management, filed Chapter 11 bankruptcy a second time to resolve claims by establishing an $8.9 billion trust to compensate cancer victims. Once approved, J&J has committed to paying all current claimants within one year and removing all talc-based products from store shelves worldwide. "These victims and their families have waited long enough for fair compensation," said trial lawyer Majed Nachawati, founding partner of Dallas-based Nachawati Law Group. "Although no amount of money can replace what these families have lost, we are proud to be a part of ad hoc leadership to resolve this litigation and finally bring some sense of peace to our clients." The Ad Hoc Committee has retained Paul Hastings, Cole Schotz, and Parkins & Rubio LLP as co-bankruptcy counsel. The Ad Hoc Committee is comprised of attorneys from Nachawati Law Group; OnderLaw, LLC; Watts Guerra LLP; Wisner Baum; Pulaski Kherkher, PLLC; Ferrer, Poirot, Wansbrough; Feller & Daniel; Rueb, Stoller & Daniel, LLP; Linville Law Group; Slater Slater Schulman LLP; Johnson Law Group; McDonald Worley; Trammell PC; Andres Pereira Law Firm; and Jenn Liakos Law. Seventy-five percent of claimants must vote to approve the settlement. The Ad Hoc Committee is believed to hold a supermajority of talc claims against J&J. Scientific studies linked J&J products to serious illnesses and cancers more than a decade ago. An investigation into J&J's own records revealed that not only did the company know of the dangers and risks associated with its products, including the iconic Baby Powder, but it also hid those facts from unsuspecting consumers for years. The initial bankruptcy ploy, in which the company dumped jury verdicts from thousands of cancer lawsuits into a shell company before filing for Chapter 11 protection, was rejected by the Third Circuit Court of Appeals. Nachawati Law Group represents individuals in mass tort litigation, businesses and governmental entities in contingent litigation, and individual victims in complex personal injury litigation. For more information visit https://ntrial.com/ About LTL Management LTL Management, LLC, is a subsidiary of Johnson & Johnson (J&J), which was formed to manage and defend thousands of talc-related claims and oversee the operations of Royalty A&M. Royalty A&M owns a portfolio of royalty revenue streams, including royalty revenue streams based on third-party sales of LACTAID, MYLANTA/MYLICON and ROGAINE products. LTL Management filed a petition for Chapter 11 protection (Bankr. W.D.N.C. Case No. 21-30589) on Oct. 14, 2021. The case was transferred to New Jersey (Bankr. D.N.J. Case No. 21-30589) on Nov. 16, 2021. The Hon. Michael B. Kaplan is the case judge. At the time of the filing, the Debtor was estimated to have $1 billion to $10 billion in both assets and liabilities. The Debtor tapped Jones Day and Rayburn Cooper & Durham, P.A., as bankruptcy counsel; King & Spalding, LLP and Shook, Hardy & Bacon LLP as special counsel; McCarter & English, LLP as litigation consultant; Bates White, LLC as financial consultant; and AlixPartners, LLP as restructuring advisor. Epiq Corporate Restructuring, LLC, is the claims agent. An official committee of talc claimants was formed in the Debtor's Chapter 11 case on Nov. 9, 2021. On Dec. 24, 2021, the U.S. Trustee for Regions 3 and 9 reconstituted the talc claimants' committee and appointed two separate committees: (i) the official committee of talc claimants I, which represents ovarian cancer claimants, and (ii) the official committee of talc claimants II, which represents mesothelioma claimants. The official committee of talc claimants I tapped Genova Burns LLC, Brown Rudnick LLP, Otterbourg PC and Parkins Lee & Rubio LLP as its legal counsel. Meanwhile, the official committee of talc claimants II is represented by the law firms of Cooley LLP, Bailey Glasser LLP, Waldrep Wall Babcock & Bailey PLLC, Massey & Gail LLP, and Sherman Silverstein Kohl Rose & Podolsky P.A. Re-Filing of Chapter 11 Petition On January 30, 2023, a panel of the Third Circuit issued an opinion directing this Court to dismiss the 2021 Chapter 11 Case on the basis that it was not filed in good faith. Although the Third Circuit panel recognized that the Debtor "inherited massive liabilities" and faced "thousands" of future claims, it concluded that the Debtor was not in financial distress before the filing. On March 22, 2023, the Third Circuit entered an order denying the Debtor's petition for rehearing. The Third Circuit entered an order denying LTL's stay motion on March 31, 2023, and, on the dame day, issued its mandate directing the Bankruptcy Court to dismiss the 2021 Chapter 11 Case. The Bankruptcy Court entered an order dismissing the 2021 Case on April 4, 2023. Johnson & Johnson on April 4, 2023, announced that its subsidiary LTL Management LLC (LTL) has re-filed for voluntary Chapter 11 bankruptcy protection (Bankr. D.N.J. Case No. 23-12825) to obtain approval of a reorganization plan that will equitably and efficiently resolve all claims arising from cosmetic talc litigation against the Company and its affiliates in North America. In the new filing, J&J said it has agreed to contribute up to a present value of $8.9 billion, payable over 25 years, to resolve all the current and future talc claims, which is an increase of $6.9 billion over the $2 billion previously committed in connection with LTL's initial bankruptcy filing in October 2021. LTL also has secured commitments from over 60,000 current claimants to support a global resolution on these terms. LUXE SPACES: Unsecureds Will Get 10.99% of Claims in 48 Months -------------------------------------------------------------- Luxe Spaces, LLC filed with the U.S. Bankruptcy Court for the Middle District of Louisiana a Subchapter V Plan of Reorganization dated April 18, 2023. The Debtor is a Baton Rouge, LA-based corporate housing company. The Debtor leases apartments, houses, condos, townhomes, etc. and then sublets them to, among others, film and televisions production companies, governmental agencies such as FEMA, and private businesses looking to temporarily house their executives. The Debtor's business began to experience difficulties after Hurricane Ian. FEMA encouraged the Debtor to expand its operations into Florida because FEMA's officials needed extended-term housing to deal with the aftermath of Hurricane Ian. To fund its expansion, the Debtor borrowed sums from several so-called merchant cash advance lenders ("MCAs") to fund its expansion. Although the Debtor was able to expand into Florida, the interest charged by and the demands of the MCAs became untenable. Further, the Debtor was defrauded by several MCA lenders. This fraud impaired the Debtor's cash flow. Coupled with the weight of the MCAs' hyperaggressive collection tactics, the Debtor made the difficult decision to seek relief under Subchapter V. The Debtor has formulated a plan of reorganization. Under the Plan, the Debtor intends to distribute the Cash generated from the operation of its corporate housing business to Holders of Allowed Claims. The Plan provides for the treatment of Claims and Interests as follows, and as more fully described herein: * Allowed General Unsecured Claims will be paid approximately 10.99% of their Allowed Claims; * Allowed Convenience Claims will be paid an estimated 50% of their Allowed Claims on the Effective Date. * Allowed Secured Claims will be paid in full; and * Holders of Interest will retain their membership interests in the Debtor. The Debtor proposes to pay all Allowed Claims in full not later than 4 years after the Effective Date of the Plan. The Debtor estimates that the Effective Date will be on or about July 1, 2023. Class 6 consists of Convenience Claims. On, or as soon as reasonably practicable after, the Effective Date, each Holder of an Allowed Convenience Claim shall receive, in full satisfaction, settlement, release, and discharge of and in exchange for such Allowed Convenience Claim, Cash in an amount equal 0.50 multiplied by the Allowed amount of such Convenience Claim. Class 6 is Impaired under the Plan. Class 7 consists of General Unsecured Claims. Except to the extent White Road agrees to less favorable treatment, in full and final satisfaction, settlement, release and discharge of an in exchange for each Allowed General Unsecured Claim, each Holder shall receive, up to the Allowed amount of such Claim a Pro Rata share of 48-monthly payments of $1,866.38. Class 7 is Impaired under the Plan. Class 8 consists of Interests in the Debtor. The sole member of the Debtor is Stephanie R. Clarke. She shall continue to be a member of the Reorganized Debtor. Class 8 is Unimpaired under the Plan. Funds needed to make Cash payments on or before the Effective Date under the Plan shall come from Cash on hand and/or the operations of the Debtor's corporate housing business. All payments on and/or after the Effective Date shall be made by Reorganized Debtor from Cash on hand and/or the operations of the Debtor's corporate housing business. The Debtor submits that the recovery of Holders of Allowed General Unsecured Claims would likely be 8.38% in a hypothetical Chapter 7 liquidation. This is approximately $57,225. Under the Plan, Holders of Allowed General Unsecured Claims would receive 10.99% of their Allowed Claims. Holders of Allowed General Unsecured Claims, as a Class, would receive present value of $75,000 under the Plan. The Debtor's financial projections show that the Debtor will have an estimated total projected disposable income of $615,180 during the Commitment Period. The estimated total payments to Holders of Allowed Administrative, Class 1, Class 2, Class 3, Class 4, Class 5 and Class 6 Claims as well as any Cure payments during the Commitment Period is $705,997. Thus, under section 1191(c) of the Bankruptcy Code, Reorganized Debtor would be required to pay Holders of Allowed General Unsecured Claims an estimated $0.00 during the Commitment Period. However, under the Plan, the Debtor proposes to pay Holders of Allowed General Unsecured Claims present value of $75,000. The final Plan payment is expected to be paid on June 31, 2027. A full-text copy of the Subchapter V Plan dated April 18, 2023 is available at https://bit.ly/3KYcu7R from PacerMonitor.com at no charge. Attorneys for Luxe Spaces: STERNBERG, NACCARI & WHITE, LLC Ryan J. Richmond, Esq. Ashley M. Caruso, Esq. 251 Florida Street, Suite 203 Baton Rouge, LA 70801-1703 Tel. (225) 412-3667 Fax (225) 286-3046 Email: ryan@snw.law ashley@snw.law About Luxe Spaces, LLC Luxe Spaces, LLC is a Baton Rouge, La.-based corporate housing company. Luxe Spaces leases apartments, houses, condos, townhomes, etc. and then sublets them to, among others, film and televisions production companies, governmental agencies such as FEMA, and private businesses looking to temporarily house their executives. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. La. Case No. 23-10042) on January 18, 2023. In the petition signed by Stephanie R. Clarke, manager, the Debtor disclosed up to $500,000 in assets and up to $1 million in liabilities. Judge Michael A. Crawford oversees the case. Ryan J. Richmond, Esq., at Sternberg, Naccari & White, LLC, is the Debtor's legal counsel. MADISON SQUARE: Club Files Plan That Will Pay Abuse Claimants ------------------------------------------------------------- Evan Ochsner of Bloomberg Law reports that Madison Square Boys & Girls Club Inc. has submitted a bankruptcy reorganization plan that would create a trust with up to $21 million to pay abuse claimants. The New York-based chapter of the Boys & Girls Club of America filed for bankruptcy last summer to resolve 149 sex abuse claims allegedly perpetrated by a now-deceased doctor who volunteered as a physician for the organization while employed by Rockefeller University. The plan, filed Wednesday, April 12, 2023, in the US Bankruptcy Court for the Southern District of New York, is a major step for the nonprofit's efforts to exit bankruptcy and resolve abuse victims' claims. About Madison Square Boys & Girls Club Madison Square Boys & Girls Club, Inc. -- https://www.madisonsquare.org -- was established to save and enhance the lives of New York City boys and girls who by means of economic or social factors are most in need of its services. Madison Square Boys & Girls Club sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 22-10910) on June 29, 2022. In the petition filed by its chief financial officer, Jeffrey Dold, the Debtor reported $50 million to $100 million in assets and $100 million to $500 million in liabilities. Judge Sean H. Lane oversees the case. The Debtor tapped Paul, Weiss, Rifkind, Wharton & Garrison, LLP as bankruptcy counsel; and Pillsbury Winthrop Shaw Pittman, LLP and Friedman Kaplan Seiler & Adelman, LLP as special counsels. Epiq Corporate Restructuring, LLC is the claims and noticing agent. The U.S. Trustee for Region 2 appointed an official committee of unsecured creditors on July 13, 2022. The committee tapped Pachulski Stang Ziehl & Jones, LLP as legal counsel; and Dundon Advisers, LLC and Island Capital Advisor, LLC as financial advisors. MARINE WHOLESALE: Exclusivity Period Extended to September 5 ------------------------------------------------------------ Judge Sheri Bluebond of the U.S. Bankruptcy Court for the Central District of California extended Marine Wholesale and Warehouse, Co.'s exclusive period to file a plan from the current deadline of March 9, 2023 to September 5, 2023. Marine Wholesale and Warehouse Co. is represented by: David R. Haberbush, Esq. Vanessa M. Haberbush, Esq. Lane K. Bogard, Esq. HABERBUSH, LLP 444 West Ocean Boulevard, Suite 1400 Long Beach, CA 90802 Tel: (562) 435-3456 Email: lbogard@lbinsolvency.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. MIDLAND COGENERATION: Fitch Affirms BB+ Rating on $560MM Sec. Notes ------------------------------------------------------------------- Fitch Ratings has affirmed Midland Cogeneration Venture LP's (MCV) $560 million secured notes due March 2025 ($131 million outstanding) at 'BB+'. The Rating Outlook has been revised to Stable from Positive. RATING RATIONALE The change to Stable Outlook reflects a combination of factors that has led to less than expected improvement and stability in the project's financial profile, due primarily to an unexpected loss of reactive power revenues and the larger than expected but volatile revenue resulting from Nitrogen Oxide (NOx) emission allowance pricing. The decision by the Federal Energy Regulatory Commission (FERC) to eliminate reactive compensation payments from December 2022 results in a loss in revenue of approximately $7 million annually from previous forecasts. Partially offsetting the loss of reactive power revenue will be the higher projected revenue resulting from the project's ability to recover emissions costs under MCV's power purchase agreement (PPA) variable cost pass-through provisions. However, the emissions pass through revenue is highly volatile, which increases financial performance uncertainty. The rating also reflects the project's high proportion of contracted revenues under a PPA with Consumers Energy Co. (Consumers; A-/Stable), which mitigates price risk. MCV's operational risk is moderate, reflecting a stable operating history supported by a strong long-term service agreement (LTSA) and significant equipment redundancy somewhat offset by mild cost variability. Rating case debt service coverage ratios (DSCR) are 1.45x in 2023 and 1.23x in 2024. KEY RATING DRIVERS Operation Risk - Midrange Significant Redundancy and Stable Operations: MCV self-performs operations, though planned operation and maintenance (O&M) and major maintenance costs are adequately covered under the LTSA with General Electric (BBB/Stable) beyond the debt's final maturity. MCV benefits from a high degree of equipment redundancy and excess capacity, which has allowed for strong historical PPA availability in excess of 99% and stable operations. The absence of dedicated O&M and major maintenance reserves is largely mitigated by coverage provided under the LTSA, liquidity from the working capital facility, and issuer-funded General Reserve and flexibility in capital spend. Supply Risk - Stronger Fully Contracted Supply: The revision of this assessment to Stronger reflects the recent extension of MCV's natural gas fuel contract with Shell Energy that covers the remainder of the rated debt term, MCV's demonstrated track record of meeting fuel supply requirements dating back to 1990, and the nature of the abundance of the resource and substitute fuel suppliers. Price risk is mitigated by pass-through of fuel costs via MCV's off-take agreements, with any remaining exposure mostly hedged with forward contracts. Revenue Risk - Midrange Contracted Revenues: Over the rated debt term, over 85% of MCV's revenues are earned through PPAs with Consumers (about 77%) and Corteva Inc. (A/Stable) (about 8%) that include fixed-price with a broad indexation to costs, and low risk of performance penalties or early termination. Cash flows are moderately sensitive to dispatch levels as the additional energy margins generated provide additional cash flow cushion for debt repayment. Debt Structure - 1 - Midrange Conventional Debt Structure: MCV's rated debt structure consists of senior, fully amortizing, fixed-rate debt. Bondholders benefit from a backward-looking equity distribution DSCR test of 1.20x as well as leverage limitations, which provide adequate liquidity. MCV also has a six-month debt service reserve funded with a letter of credit. Financial Profile MCV's strong track record of operations and unique level of operational flexibility have been demonstrated through its stable financial profile, with historical Fitch-calculated DSCRs (2015-2020, excluding the all-plant outage year in 2021) averaging 1.37x. The 2021 refinancing lowered overall debt service for the remainder of the rated debt term. Additionally, MCV has shown the ability to generate merchant cash flow and provide a slight uplift to the resulting coverages. Fitch concluded a 2022 DSCR of 1.54x, which excludes the General Reserve, whereas MCV reports a 2022 DSCR of 1.65x, as MCV factors in the General Reserve funding in its DSCR calculation. Fitch has updated its cases to account for the aforementioned events and included an additional stress to NOx emission allowance price forecasts to address the volatility in this market. Fitch rating case also includes stresses to plant availability, overall costs and efficiency alongside some deductions and exclusions of other projected revenues such as merchant sales above the PPA contracted volume. Rating case DSCRs are 1.45x in 2023 and 1.23x in 2024; adding merchant revenue results in a six-basis-point improvement for 2024. Rating case cash flows remain sensitive to variances in pricing. While MCV has historically experienced stronger financial performance based on higher PPA cash flows from increased dispatch, a lower cost profile, and unique operational flexibility and resiliency atypical of most thermal plants, given the FERC decision and volatile emission allowance prices, the project's updated financial profile is commensurate with a 'BB+' rating. PEER GROUP The rating is comparable with other privately rated thermal projects, which have comparable average rating case DSCR forecasts of at least 1.40x supported by contracted cash flows from investment-grade counterparties. Mackinaw Power (BBB-/Stable) is comprised of simple cycle gas-peaking units that have low reliance on dispatch levels to service debt, its fixed-price fuel tolling agreement and a track record of historical coverages exceeding Fitch's base case expectations (average of 1.9x in the past three years), supporting its higher rating. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: Increase in costs and/or material declines in emission allowance prices without any offsetting factors that would lead to Fitch calculated DSCRs persistently falling below rating case expectations. Factors that could, individually or collectively, lead to positive rating action/upgrade: Fitch-calculated DSCR that is consistently in line with base case expectations. CREDIT UPDATE In February 2023, FERC accepted a proposal by MISO Transmission Owners that eliminated all charges for the provision of reactive power effective as of Dec. 1, 2022. As a result, this decision eliminated the reactive power revenue MCV historically received from MISO to the amount of approximately $7 million annually. Management is in the process of appealing the FERC decision. Higher than anticipated market values of emission allowances also drove financial performance in 2022 and is expected to partially offset the impact to coverages from the loss of reactive power revenues. The market value of emission allowances are included in COP that is directly passed through under the PPA. Group 3 seasonal NOx pricing (May to September 2022) reached nearly $45,000/ton as compared with $500/ton-$1,000/ton expected in the project's budget. As of March 2023, pricing has come down to the $15,000/ton area. While the higher COP led to an additional uplift to revenues in 2022, it also resulted in lower dispatch from less overnight generation. The high NOx emission allowance price environment has been underpinned by higher demand from more coal plants being dispatched by MISO due to high natural gas prices. Further, regulatory uncertainty and expectations for more strict NOx emissions limits and allowance budgets while the EPA was in the process of finalizing its Good Neighbor Rule proposal for Group 3, also contributed to elevated prices. The EPA has since finalized the plan in March of this year providing market players with more clarity. With the expected retirement of coal plants in coming years, natural gas prices receded from peaks, and a larger expected mix of renewables to the overall energy supply, NOx emission allowance prices are projected to decline over time. Given the inherent volatility, Fitch has performed sensitivity testing to a range of NOx price scenarios. Sensitivity analysis indicates the project's coverages in the remaining years are commensurate with a 'BB+' rating. In 2022, MCV achieved a Fitch-calculated DSCR of 1.54x, which, excluding the general reserve funds, is slightly lower than base case expectation of 1.59x. When including the general reserve, the DSCR in 2022 was 1.65x. For 2022, PPA availability was 99.8% in line with MCV's track record of maintaining above 99.6% since 2010 (excluding scheduled plant outage year). Plant capacity factor was lower than budget due to higher price of fuel coupled with higher market value of NOx emissions allowances. The project's other energy sales via merchant capacity credits continue to benefit from favorable supply/demand dynamics in MISO Zone 7, with higher capacity values realized. MCV continues to contract out its merchant capacity credits bi-laterally in coming years, with the remainder offered up for auction. MCV will move from an annual to a seasonal capacity construct starting in the 2023/2024 planning year. Fitch has not included in its analysis any impact from this shift to seasonal that could include some upside on capacity credits allocated to MCV as indicated by management. With MCV's new owner on board, integration activities are in progress through 2023. Fixed O&M expenses in 2022 were approximately $7 million higher than budgeted, partially due to higher one-time expenses related to the sale and transition costs. Management indicated the potential for future cost savings after efficiencies are realized in IT and insurance policy integration. Maintenance and capital expenditures are forecast to be higher in remaining years due to some project costs related to the black start project being pushed out to 2023, accounting for costs for spare inventory, and an additional planned C-inspection in 2024. Black start revenues are expected to be certain as part of a FERC tariff and initiate by mid-2023. FINANCIAL ANALYSIS MCV has a high level of equipment redundancy to withstand temporary operational issues that may arise. Management indicates that two to three gas turbines can be down at a time depending on the season while still continuing to maintain 100% PPA availability. Fitch's base and rating case assume an average availability of 98.8%, a SEPA load of 46 MW, a 30% reduction to projected ancillary and arbitrage revenues, and exclusion of merchant sales. Both cases are adjusted for the loss of reactive power revenues and updated with stresses applied to NOx emissions allowance price forecasts. The base case assumes inflationary cost growth and a heat rate in line with historical averages. NOx emissions allowance price forecasts are guided by a scenario where coal retirements occur faster than scheduled, leading to an accelerated decline in forecasted emission allowance prices provided by MCV's independent consultant by one year. NOx emissions allowance price is assumed at $10,000/ton in 2023 and $5,000/ton in 2024. Fitch's base case DSCRs are 1.53x in 2023 and 1.34x in 2024. Fitch's rating case assumes a 5% higher cost profile, 1% increase to the heat rate and further stress to NOx emissions allowance prices. NOx emissions allowance prices are assumed at a two-year faster schedule with the price assumed at $5,000/ton in 2023 and $300/ton in 2024. Under the rating case, DSCRs are 1.45x in 2023 and 1.23x in 2024. Under both cases, merchant capacity and energy cash flows provide on an additional cushion of 6 basis points to 2024 coverage. Historically, MCV has shown the ability to generate some level of merchant cash flows, a trend likely to continue given the current favorable market dynamics in Zone 7. Given the large price volatility of emissions allowances in 2022 and the updated forecast for the remainder of the debt term, Fitch has performed multiple downside price sensitivity analyses to assess the potential adverse impact on coverages. In almost all of the downside scenarios, coverages are maintained at a level commensurate with a 'BB+' rating or higher. Fitch notes that there may be offsetting factors to declines in NOx emission allowance prices such as potential higher dispatch and volumes that would occur from lower overall COP. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Entity/Debt Rating Prior ----------- ------ ----- Midland Cogeneration Venture Limited Partnership Midland Cogeneration Venture Limited Partnership /Debt/1 LT LT BB+ Affirmed BB+ MISSISSIPPI CENTER: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Mississippi Center for Advanced Medicine, P.C. 7731 Old Canton Road Suite B Madison, MS 39110 Business Description: MCAM is a healthcare organization in Mississippi that integrates subspecialty medical care, clinical pharmacy services, and care coordination for patients with pediatric, congenital, and maternal fetal disorders. Chapter 11 Petition Date: April 21, 2023 Court: United States Bankruptcy Court Southern District of Mississippi Case No.: 23-00962 Judge: Hon. Jamie A. Wilson Debtor's Counsel: Craig M. Geno, Esq. LAW OFFICES OF CRAIG M. GENO, PLLC 587 Highland Colony Parkway Ridgeland, MS 39157 Tel: 601-427-0048 Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Jordan Robinson as vice president and chief operating officer. A copy of the Debtor's list of 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/XQJWCWA/Mississippi_Center_for_Advanced__mssbke-23-00962__0004.0.pdf?mcid=tGE4TAMA A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/XOEMWTQ/Mississippi_Center_for_Advanced__mssbke-23-00962__0001.0.pdf?mcid=tGE4TAMA MKS REAL ESTATE: Hilco Completes Sec. 363 Bankruptcy Sale --------------------------------------------------------- Hilco Real Estate, LLC has successfully completed the Chapter 11 Sec. 363 Bankruptcy sale of a 50,000± square foot, flex warehouse on 13.72± acres located in Fort Worth, Texas, scheduled Bankruptcy Petition #: 22-42618-ELM11, In re: MKS Real Estate, LLC. The sale ultimately closed for $11,800,000 to TKG Management, Inc., a Columbia, Missouri-based privately held real estate development, investment, and property management firm. Hilco Real Estate's national bankruptcy team worked along with the debtor in possession to effectively structure an accelerated sale designed to maximize the interest in and the value of the assets through a competitive bid process. While no stranger to short timelines, the HRE team aggressively marketed the property nationally during a five-week period, navigating complex circumstances while focusing on bringing speed-to-value. The sale process resulted in multiple competitive offers from strong buyer groups allowing HRE's client to go under contract over three weeks before the originally-scheduled bid deadline, and close just 20 days thereafter, surpassing all debtor and creditor expectations. Ben Zaslav, director of business development at Hilco Real Estate, stated, "Our team's knowledge of the bankruptcy code and real estate sales provides our bankruptcy clients with the best chance to maximize the value of their commercial real estate assets. Providing effective, actionable solutions and speed-to-value, is in part, what sets Hilco Real Estate above its competition." Steve Madura, senior vice president at Hilco Real Estate, stated, "Whether as a commercial investment or end-user opportunity, this sale was perfectly set to leverage Fort Worth's booming economic growth and current activity, regardless of the unpredictable market rates seen throughout the country." He continued, "Ultimately, this sale provided the debtor with the ability to pay all creditors in full, and afforded the buyer an incredible opportunity to further cement their footprint in this area and expand their business operations. We consider this a win-win for all." About Hilco Real Estate Hilco Real Estate ("HRE"), a Hilco Global company (HilcoGlobal.com), is headquartered in Northbrook, Illinois (USA). HRE is a national provider of strategic real estate disposition services. Acting as an agent or principal, HRE uses its experience to advise and execute strategies to assist clients in deriving the maximum value from their real estate assets. By leveraging multi-faceted sales strategies & techniques, aggressive repositioning and restructuring experience, a vast and motivated network of buyers and sellers, and substantial access to capital, HRE exceeds expectations even in the most complex transactions. About MKS Real Estate MKS Real Estate, LLC owns and operates an office building valued at$14.4 million. It is based in Fort Worth, Texas. MKS Real Estate filed a Chapter 11 petition (Bankr. N.D. Texas Case No. 21-40424) on March 1, 2021. On Oct. 28, 2021, the court entered an agreed order dismissing the bankruptcy case for one year or until such time that the claim was paid in full, or the property is foreclosed, whichever was later. In consideration for the Debtor being given one year to sell the real property, the court ordered "that [Cadence (formerly known as BancorpSouth)] will have the right to post the real property for non-judicial foreclosure and proceed with the foreclosure on Nov. 1, 2022 in the event the claim is not paid in full on or before Oct. 31, 2022." MKS Real Estate again filed a Chapter 11 petition (Bankr. N.D. Texas on Case No. 22-42618) on Oct. 31, 2022. In the petition filed by Olufemi Ashadele as owner, the Debtor reported assets between $10 million and $50 million and liabilities between $1 million and $10 million. Judge Edward L. Morris oversees the 2022 case. The Debtor is represented by M. Jermaine Watson, Esq., at Cantey Hanger, LLP. MONTICELLO ACADEMY: S&P Lowers 2014 LT Bond Rating to 'BB+' ----------------------------------------------------------- S&P Global Ratings lowered its long-term rating to 'BB+' from 'BBB-' on Monticello Academy (MA), Utah's series 2014 charter school revenue refunding bonds, issued by the Utah Charter School Finance Authority. The outlook is stable. "The downgrade reflects MA's more modest operating performance and weakened liquidity metrics due to nonrecurring expansion costs, combined with an increased debt burden after purchasing the West Point campus," said S&P Global Ratings credit analyst Jesse Brady. S&P expects the school will continue to meet enrollment projections; however, it believes the increased leverage and expansion risk is better reflected in the 'BB+' rating. As of June 30, 2022, Monticello had $8 million in debt outstanding, consisting entirely of the series 2014 bonds. In November 2022, the school issued its privately placed, unrated series 2022 bonds, for the purpose of acquiring its previously leased West Point school facility. S&P said, "Because the 2022 bonds were issued after the fiscal year, we refer to MA's bonds and associated debt service obligations as pro forma. All bonds are fixed-rate obligations secured by a pledge of the charter school's revenues at both locations, although the pledge on the 2022 bonds is subordinate to the 2014 bonds pursuant to the 2022 loan agreement. We do not view the 2022 private placement as presenting contingent liquidity risk because acceleration due to an event of default under the loan agreement is not immediate and must be directed by a majority bondholder vote." The 'AA' program rating on Monticello's series 2014 refunding bonds reflects S&P's view of the school's inclusion in the State of Utah's moral obligation program. This analysis, however, reflects only MA's underlying characteristics and not the program enhancement or the school's qualification under that program. The 'BB+' rating further reflects S&P's view of Monticello's: -- High debt burden and relatively small, but growing, operating base; -- History of positive operations resulting in historically good maximum annual debt service (MADS) coverage, although performance moderated from fiscal years 2020 through 2022 due to start-up costs for the new campus, which opened in fall 2020; -- Sufficient unrestricted days' cash on hand, although trending negatively in the past few years due the school's expansion efforts; -- Highly competitive environment, though demand and enrollment has stabilized and recovered since the decision to close its high school program in the fall of 2018; and -- Inherent risk, as with all charter schools, that the school might be closed for nonperformance of its charter or for financial distress before the final maturity of the bonds. Partially offsetting the above weaknesses, in S&P's opinion, are MA's: -- Steady demand and modest waitlist, with healthy growth over the past three years fueled by expansion to a new campus in an adjacent county with more favorable population growth prospects; -- Excellent statutory framework environment that supports the academy's market position; and -- Evergreen charter status with Utah State Charter School Board, the authorizer, coupled with a favorable charter school funding environment. S&P said, "The stable outlook reflects our view of MA's steady demand profile, spurred by healthy enrollment growth in recent years following the opening of the West Point campus as well as record enrollment at the legacy Highbury campus for fall 2022, which we believe should support positive financial operations over the outlook period, thereby improving MADS coverage and moderating the debt burden relative to the softer performance in recent years brought on by the expansion. "We could consider a negative rating action if financial operations erode such that MADS coverage weakens and liquidity is not at least sustained at current levels. In addition, we could also lower the rating if MA issues material debt without a commensurate increase in resources or is unable to meet enrollment projections. "A positive rating action would be based on a demonstrated trend of improved operating margins and MADS coverage, with sustained liquidity growth back to levels consistent with that of higher rating category medians. We would also expect the school to maintain at least stable demand metrics during this period and continue to grow enrollments at the West Point campus." MP ZEBULON: Amends Equity Interest & Insider Claims Pay Details --------------------------------------------------------------- MP Zebulon, LLC, et al., submitted a Second Amended Joint Chapter 11 Plan of Liquidation under Subchapter V dated April 18, 2023. This Plan provides a mechanism for the Debtors to maximize the value of various assets in which the Debtors own a direct or an indirect economic interest and to utilize value generated from those assets for the benefit of their creditors. As set forth in this Plan all trade creditors and certain other creditors with Allowed Claims should be paid in full no later than 90 days after the Plan becomes effective. The Debtors estimate that the Effective Date of the Plan will occur no later than May 8, 2023. The Debtors estimate there will be sufficient funds to pay all Allowed Unsecured Claims under Class 3 in full under the Plan, with funds remaining for distributions to Holders of Allowed Insider Claims and Equity Interests. Class 4C consists of all Allowed Insider Claims asserted against the Consolidated Debtors. Following the payment in full of all Distributions required to Holders of Allowed Administrative Expense Claims, Allowed Priority Tax Claims, and Allowed Claims in Classes 1C, 2C and 3C of this Plan, the Disbursing Agent shall make pro-rata Distributions on each Distribution Date or as soon thereafter as is reasonably practicable, to the Holders of Allowed Class 4C Claims of any available Liquidation Proceeds less the Plan Funding Reserve from the Consolidated Estate, until the date on which all Allowed Class 4C Claims have been paid in full. Class 5A consists of all Holders of Allowed Equity Interests in KLMG Food, LLC. Holders of Allowed Equity Interests in the Class 5A shall retain their Equity Interests following the Effective Date and shall retain all legal, equitable and contractual rights to which they may be entitled under applicable Georgia law, subject to applicable provisions of the Bankruptcy Code, Bankruptcy Rules and the Plan. Class 5A Holders of Equity Interests shall receive no Distributions under the Plan on account of such Equity Interests unless and until all Distributions required to be made to Holders of Allowed Administrative Expense Claims, Allowed Priority Tax Claims, and Allowed Claims with respect to Classes 1A, 2A, 3A and 4A have been satisfied. Upon payment in full of all Allowed Claims in such Classes, the Disbursing Agent shall make Distributions to Class 5A Holders of Equity Interests on each Distribution Date or as soon thereafter as is reasonably practicable, of any available Liquidation Proceeds from the Estate of KLMG Food, LLC. Distributions shall be made as prescribed in the Equity Distribution Procedures. Class 5B consists of all Holders of Allowed Equity Interests in MP Perry, LLC. Holders of Allowed Equity Interests in the Class 5B shall retain their Equity Interests following the Effective Date and shall retain all legal, equitable and contractual rights to which they may be entitled under applicable Georgia law, subject to applicable provisions of the Bankruptcy Code, Bankruptcy Rules and the Plan. Class 5B Holders of Equity Interests shall receive no Distributions under the Plan on account of such Equity Interests unless and until all Distributions required to be made to Holders of Allowed Administrative Expense Claims, Allowed Priority Tax Claims, and Allowed Claims with respect to Classes 1B, 2B, 3B and 4B have been satisfied. Upon payment in full of all Allowed Claims in such Classes, the Disbursing Agent shall make Distributions to Class 5B Holders of Equity Interests on each Distribution Date or as soon thereafter as is reasonably practicable, of any available Liquidation Proceeds from the Estate of MP Perry, LLC. Distributions shall be made as prescribed in the Equity Distribution Procedures. Class 5C consists of all Holders of Allowed Equity Interests in one or more of the Consolidated Debtors. As of the Effective Date, and upon substantive consolidation of the Consolidated Debtors, each Holder of Allowed Equity Interests in each of the Consolidated Debtors shall be deemed to hold an Allowed Equity Interest in the Consolidated Debtors and the Consolidated Estate in the same percentage that such Holder held in each of the Consolidated Debtors prior to the Effective Date. Subject to the foregoing, Holders of Allowed Equity Interests in the Class 5C shall retain their Equity Interests following the Effective Date and shall retain all legal, equitable and contractual rights to which they may be entitled under applicable Georgia law, subject to applicable provisions of the Bankruptcy Code, Bankruptcy Rules and the Plan. Class 5C Holders of Equity Interests shall receive no Distributions under the Plan on account of such Equity Interests unless and until all Distributions required to be made to Holders of Allowed Administrative Expense Claims, Allowed Priority Tax Claims, and Allowed Claims with respect to Classes 1C, 2C, 3C and 4C have been satisfied. Upon payment in full of all Allowed Claims in such Classes, the Disbursing Agent shall make Distributions to Class 5C Holders of Equity Interests on each Distribution Date or as soon thereafter as is reasonably practicable, of any available Liquidation Proceeds from the Consolidated Estate. Distributions shall be made as prescribed in the Equity Distribution Procedures. All Cash necessary for Distributions pursuant to this Plan may be obtained from (a) existing Cash balances, (b) proceeds made available by sale or other liquidation of the Debtors' Property, and (c) any net proceeds realized from any Retained Actions. A full-text copy of the Second Amended Liquidating Plan dated April 18, 2023 is available at https://bit.ly/3AiTxYL from PacerMonitor.com at no charge. Counsel for the Debtors: J. Robert Williamson, Esq. Ashley Reynolds Ray, Esq. SCROGGINS & WILLIAMSON, P.C. 4401 Northside Parkway, Suite 450 Atlanta, GA 30327 Tel: (404) 893-3880 About MP Zebulon MP Zebulon, LLC sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Ga. Case No. 22-51106) on Sept. 23, 2022, with up to $500,000 in both assets and liabilities. Judge Austin E. Carter oversees the case. The Debtor tapped J. Robert Williamson, Esq., at Scroggins & Williamson P.C. as legal counsel, and GGG Partners, LLC as restructuring advisor. Richard Gaudet, a partner at GGG, serves as the Debtor's chief restructuring officer. MR INVESTMENTS: Twin Cities Firehouse Subs Franchisee in Chapter 11 ------------------------------------------------------------------- Keith Schubert of Minneapolis / St. Paul Business Journal reports that the franchisee of two Twin Cities Firehouse Subs shops filed for Chapter 11 bankruptcy on April 4, 2023 listing more than $1 million in debt. Stillwater-based MR Investments LLC made the voluntary filing in U.S. Bankruptcy Court listing $68,376 in assets and $1,140,595 in debt. A lawyer for Michael Ruoho, who is the authorized debtor for MR Investments LLC, attributed the failures of the two sub shops to hardships brought on during the Covid-19 pandemic. Ruoho also lists himself as the CEO of MR Investments LLC and MR Investments Holding Inc. on his LinkedIn profile. Ruoho purchased the two shops -- one in Woodbury and one in Plymouth — in 2018. The bankruptcy case was filed one day before an eviction notice was set to be served at the Plymouth location, according to his lawyer. Both locations were open as of Wednesday, April 12, 2023. Half of the debts are owed to the U.S. Small Business Administration, from which Ruoho received a $499,900 Covid-19 Economic Injury Disaster Loan. Nearly all the assets listed in the filing come from Ruoho's two shops. The Woodbury location is listed as a $55,797 asset and the Plymouth location is listed as a $54,966 asset. But, according to the filing, the value of the collateral is only worth $68,376. Jacksonville, Fla.-based Firehouse Restaurant Group, the chain's franchisor, could not be reached for comment. About MR Investments MR Investments LLC sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Minn. Case No. 23-30634) on April 4, 2023. In the petition filed by Michael J. Ruoho, as chief manager, the Debtor reported total assets of $68,376 and total liabilities of $1,140,595. The Debtor is represented by: John D. Lamey III, Esq. LAMEY LAW FIRM, P.A. 980 Inwood Ave N Oakdale, MN 55128-7094 Tel: 651-209-3550 Fax: 651-789-2179 Email: jlamey@lameylaw.com NAUTILUS POWER: Moody's Rates $486MM Superpriority Term Loan 'B3' ----------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to Nautilus Power, LLC's extended $486 million superpriority senior secured term loan due November 2026, a new $54 million superpriority revolving credit facility due May 2026, and a $30 million senior secured working capital facility that ranks pari passu with the superpriority facilities. Concurrently, Moody's downgraded the rating on its non-extended existing senior secured term loan facility with $13 million outstanding due May 2024 (Cusip: 63909UAB9) to Caa1 from B3. Moody's also revised Nautilus' outlook to stable from negative. Assignments: Issuer: Nautilus Power, LLC Senior Secured Superpriority Bank Credit Facility, Assigned B3 Senior Secured Superpriority Revolving Credit Facility, Assigned B3 Senior Secured Working Capital Facility, Assigned B3 Downgrades: Issuer: Nautilus Power, LLC Senior Secured Bank Credit Facility, Downgraded to Caa1 from B3 Outlook Actions: Issuer: Nautilus Power, LLC Outlook, Changed To Stable From Negative RATINGS RATIONALE Nautilus' B3 senior secured rating for its extended credit facilities and the outlook revision to stable reflects Moody's view that the recent amendment removes near term refinancing risk and capacity penalty-induced liquidity uncertainty from the credit profile. In addition to addressing near-term refinancing risk, the amendment's lower total debt level reflects a demonstration of support from the portfolio sponsor, Carlyle, which contributed $58 million of equity in the form of cash and converted debt. Carlyle is also providing liquidity support with a $30 million working capital facility for Nautilus to help address PJM capacity penalty requirements. The reduced debt levels and the additional liquidity support provides sufficient runway for Nautilus to meet its debt service needs over the next couple years. The downgrade to Caa1 from B3 on the existing term loan (Cusip: 63909UAB9) acknowledges its subordinate position to the extended superpriority term loan. The credit profile also recognizes the project's recent liquidity and cash flow struggles following a series of weak PJM auction results plus $39 million in capacity performance penalty expenses from Winter Storm Elliott. This penalty will weaken Nautilus' financial metrics for FY 2023. Liquidity is manageable in 2023 due to sponsor support in the form of a $20 million cash contribution and a sponsor-provided $30 million working capital facility. Beyond 2023, Nautilus is expected to produce weak average financial metrics over the remainder of the debt term including DSCRs just over 1.2x, project cash flow to debt around 2-3% and debt to EBITDA of 7-8x. The credit profile also recognizes the degree of sponsor support from Carlyle along with the operating benefits that Cogentrix brings to the overall portfolio. Rating Outlook The stable outlook assumes a strong operating profile and reflects Moody's expectations for credit metrics to remain weak, but within in B-rating category for the next 12 to 18 months with minimal pricing uplift from forward capacity auctions in PJM and ISO-NE. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS An upgrade could occur with further deleveraging and sustained debt service over 1.3x and project cash flow to debt in the high single digits. The rating could be downgraded if an operational disruption, additional capacity performance penalty or other strains on liquidity cause a severe deterioration in credit metrics. Profile Nautilus is a wholesale power generation and marketing company owned by The Carlyle Group. Nautilus owns a portfolio of six power generation assets totaling 1,947 MWs located in the PJM and ISO-NE power markets. In the EMAAC area of PJM, Nautilus' portfolio of natural gas fired peaking facilities includes 373 MW Ocean Peaking Power and 725 MW Rock Springs as well as its 80% ownership of 222 MW dual-fueled Lakewood Energy facility. In ISO-NE, Nautilus owns the 627 MW dual-fueled, combined-cycle Newington Energy facility. Methodology The principal methodology used in these ratings was Power Generation Projects Methodology published in January 2022. NAVACORD CORP: Fitch Affirms LongTerm IDRs at 'B', Outlook Stable ----------------------------------------------------------------- Fitch Ratings has affirmed at 'B' the Long-Term Issuer Default Rating (IDR) for Navacord Corp. (Navacord) and its wholly owned borrower subsidiary, Jones DesLauriers Insurance Management Inc. The Rating Outlook is Stable. Fitch has also affirmed the company's senior revolving credit facility at 'B+'/'RR3', first lien CAD term loans at 'B+'/'RR3', senior secured notes at 'B+'/'RR3' and affirmed its senior unsecured notes at 'CCC+'/'RR6'. Navacord's 'B' rating is reflective of the company's resilient organic growth profile and strong operating margin profile. The rating also reflects the company's position as a top four commercial brokerage firm in Canada. Limitations to the rating include an aggressive financial policy and the expectation to maintain an elevated leverage profile. KEY RATING DRIVERS Solid Market Position: Fitch views Navacord's solid position in the Canadian insurance distribution market as a credit positive, with it being the fourth largest commercial brokerage and benefits firm in Canada. The insurance brokerage industry is highly fragmented and competitive, but Navacord realized solid organic revenue growth at least in the mid-single digit range since 2017 (double digit organic growth from 2019-2022). This compares favorably against other Fitch-rated brokers in North America. Fitch expects the industry to grow mid-to high-single digits over time but certain higher growth brokers such as Navacord may exceed this growth rate. Navacord also sustained solid EBITDA margins in the high-20% to mid-30% range in the past five years. High Leverage: Fitch views high leverage as a limiting factor for the IDR and will likely constrain the rating to the 'B' rating category in the near-term. Pro forma for M&A and the pending secured notes issuance, reported EBITDA leverage (debt/EBITDA) is 8.7x while net leverage is in the mid-7.0x range. Fitch expects Navacord will continue to maintain an elevated leverage profile due to its aggressive M&A strategy. Well-managed insurance brokerage firms can tolerate a higher degree of financial leverage versus other Corporates sectors given the industry's high degree of stability throughout the economic cycle, with large brokers having only experienced organic sales declines in the low-single digit range following the 2008 global financial crisis. However, Navacord's leverage is higher versus other Fitch-rated peers. Diversification: Navacord benefits from broad client, broker, and carrier diversification although it solely operates in Canada. It operates throughout Canada, with more than 50,000 commercial clients and its top 20 customers only comprise 4% of revenue. Its top 10 producers are less than 10% of revenue and it is also diversified by insurance carrier partners. It is also fairly well diversified by lines of business, with a mix of commercial property & casualty (P&C), personal P&C, and benefits offerings. Its geographic concentration does not constrain the rating to its current IDR, given its strong market position. However, Fitch believes the company could expand outside Canada over time. Stable Business Model: Fitch believes the company operates a fairly predictable business model in an industry that performs well throughout the economic cycle. Navacord was founded in 2014 and has a more limited operating history versus other Fitch-rated brokers, but Fitch expects the industry to exhibit much lower revenue and earnings declines in a recession versus other sectors given the highly sticky nature of insurance. Many large global insurance brokers grew organically each year since 2007, except for a modest decline during 2009, and also grew during the 2020 coronavirus pandemic. However, Navacord faces more unique risk given its geographic exposure solely to the Canadian market. Cash Flow Ratios Constrained: Fitch-defined FCF will likely be constrained over the ratings horizon due to debt-financed M&A that has led to high financial leverage and rising interest costs. Interest coverage is also low in the near-term and near Fitch's negative sensitivity threshold for the 'B' IDR. Importantly, much of the constrained FCF is a derivative of its M&A roll-up strategy, and Fitch views the underlying cash generation profile of the business as healthy. If the company were to significantly slow its M&A strategy, Fitch believes cash flow generation would improve materially unless all of excess cash flow were then diverted to shareholder capital returns. DERIVATION SUMMARY Navacord competes in a fragmented landscape of insurance brokerage and benefits services providers that includes other local/regional companies, national agents and large multi-national brokers. Fitch rates numerous companies in the insurance brokerage industry that are comparable in terms of scale, operating profile and business model. Navacord maintains a top four position among commercial brokers in Canada and has established reasonable size with revenue of more than CAD500 million and annual premium near CAD3.0 billion. However, it remains relatively small and has meaningfully higher financial leverage versus larger global brokers such as Marsh & McLennan Companies, Inc. (A-), Aon plc (BBB+), among others. The 'B' rating is reflective of the company's strong historic growth profile, solid profitability, and diversification among its customers and business segments. This is offset by an aggressive, debt-financed M&A strategy, that has led to high gross leverage. KEY ASSUMPTIONS - Organic revenue growth in the mid-single digit percentage range over the ratings horizon plus contributions from incremental M&A through FY25; - EBITDA margins estimated in the low-30% range, with some forecasted pressures from cost/wage inflation and additional growth investments. Also, Fitch expects further cost normalization as the company returns to post-COVID working practices; - Interest rates assumptions are as follows: CDOR of 5% during 2023-2025; - Cash taxes and working capital remain a modest use of cash flow in the next few years; - Fitch assumes Navacord will continue its growth-driven M&A strategy and will incur cash outflows related to purchase and integration costs. Fitch assumes this remains the primary use of cash flow and incremental M&A is funded via internal cash flow and incremental debt. Recovery Analysis - For entities rated 'B+' and below, where default is closer and recovery prospects are more meaningful to investors, Fitch undertakes a tailored, or bespoke, analysis of recovery upon default for each issuance. The resulting debt instrument rating includes a Recovery Rating or published 'RR' (graded from RR1 to RR6), and is notched from the Issuer Default Rating accordingly. In this analysis, there are three steps: (i) estimating the distressed enterprise value (EV); (ii) estimating creditor claims; and (iii) distribution of value. - Fitch assumes Navacord would emerge from a default scenario under the going concern approach liquidation. Key assumptions used in the recovery analysis are as follows: (i) Going concern EBITDA - Fitch estimates a going concern EBITDA of approximately CAD138 million, or below the company's current run-rate EBITDA. This lower level of EBITDA considers competitive and/or company- specific pressures that hurt earnings in the future while also considering that its M&A strategy could lead to a much higher EBITDA base before any risk of bankruptcy. (ii) EV Multiple - Fitch assumes a 6.5x multiple, which is validated by historic public company trading multiples, industry M&A and past reorganization multiples Fitch has seen across various industries. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - EBITDA Leverage, or Debt/EBITDA, sustained below 6.5x; - (CFO-capex)/Debt sustained in low double digits. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Deterioration in operating fundamentals that lead to weaker revenue trends, margin underperformance, and compression of cash flows; - Interest Coverage, or EBITDA/Interest paid, sustained below 1.5x; - (CFO-capex)/Debt sustained near 0% or below; - EBITDA Leverage sustained above 8.0x. LIQUIDITY AND DEBT STRUCTURE Strong Liquidity: Navacord has a fairly well-positioned balance sheet pro forma for the new senior notes issuance. The company had roughly CAD147 million of unrestricted cash on its balance at Jan-23 and is projected to have more following the debt raise. Additionally, it has full access to its CAD150 million senior secured revolving credit facility. Cash needs are fairly minimal given the nature of its business that has low capital intensity and working capital needs, along with fairly manageable debt amortization and cash taxes. This should provide sufficient liquidity to both operate its current business as well as invest for organic growth and M&A. Debt Structure: Pro forma for the upcoming senior notes issuance, the company's debt capital consists of: (i) a CAD150 million senior secured revolver (i) CAD384 million of senior secured first lien term loans; (iii) USD600 million of senior secured notes (including upcoming issuance of USD100 million); and (iv) USD300 million of senior unsecured notes. Its revolver and term loans are floating rate while the senior notes will have a fixed coupon. There are no near-term maturities with the first lien debt maturing in 2028 while the senior notes will mature in 2030. Fitch expects its debt will grow in the future as the company continues its M&A driven growth strategy. ISSUER PROFILE Navacord Corp. was founded in 2014 and competes in the Canadian commercial insurance brokerage space. It was incorporated under Navacord Corp. in 2018. The company is a top four commercial insurance broker and benefits provider in Canada, with approximately CAD3.0 billion of annual premium handled for the LTM period through July 2022. Navacord has a network of over 40 offices serving in excess of 50,000 commercial clients. Madison Dearborn Partners (MDP) completed its investment in Navacord in August 2018, currently owning 47% of the company. Navacord's management and employees account for the 53% remaining ownership. The company has approximately 2,200 employees. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Jones Deslauriers Insurance Management Inc. LT IDR B Affirmed B senior unsecured LT CCC+ Affirmed RR6 CCC+ senior secured LT B+ Affirmed RR3 B+ Navacord Corp. LT IDR B Affirmed B NORDSTROM INC: Moody's Affirms Ba1 CFR & Alters Outlook to Negative ------------------------------------------------------------------- Moody's Investors Service changed Nordstrom, Inc.'s outlook to negative from stable. At the same time, Moody's affirmed Nordstrom's long term ratings including its corporate family rating at Ba1, its probability of default rating at Ba1-PD, its senior unsecured notes rating at Ba1, and its commercial paper rating of Not Prime ("NP"). Nordstrom's speculative grade liquidity rating remains ("SGL") SGL-1 and its Ba1 issuer rating was withdrawn. The change in outlook to negative reflects Nordstrom's continued operating challenges, particularly in its off-price segment. Nordstrom's operating margins remain below its pre 2020 historical levels and low relative to its peers despite expected improvement in 2023. Although the company has taken decisive action to improve its inventory position, adjust its Nordstrom Rack strategy, and divest its unprofitable Canada business, a rising wage environment and uncertain economic backdrop pose significant risk to returning its credit profile to be reflective of the Ba1 corporate family rating. The withdrawal of Nordstrom's Ba1 issuer rating is for administrative reasons as Nordstrom already has a corporate family rating in place. Nordstrom's CIS score was lowered to CIS-3(moderately negative) from CIS-2(neutral to low) as a result of its governance score being lowered to G-3 from G-2. The change in its governance score to G-3 from G-2 is related to both its financial strategy and risk management as well as its management credibility and track record as Nordstrom has missed performance expectations as it struggles to return to historical levels of profitability given operational challenges at Nordstrom Rack. Although the company continues to have a conservative funded debt levels, it has a partially secured capital structure and credit metrics have weakened as a result of operating performance. Affirmations: Issuer: Nordstrom, Inc. Corporate Family Rating, Affirmed Ba1 Probability of Default Rating, Affirmed Ba1-PD Senior Unsecured Commercial Paper, Affirmed NP Senior Unsecured Regular Bond/Debenture, Affirmed Ba1 (LGD4) Withdrawals: Issuer: Nordstrom, Inc. Issuer Rating, Withdrawn , previously rated Ba1 Outlook Actions: Issuer: Nordstrom, Inc. Outlook, Changed To Negative From Stable RATINGS RATIONALE Nordstrom's Ba1 corporate family rating is supported by its solid market positioning in both the full price and off-price segments as well as its conservative approach to funded debt. The company has maintained very good liquidity reflected in its $800 million secured revolving credit facility that is fully available, cash balance of $687 million as of January 28, 2023, and unencumbered real estate. The company has made significant investments historically to provide superior service at all customer contacts points whether in-store, online or through mobile and continues to invest. Nonetheless, the company had to contend with excess inventory as consumer demand particularly for its Rack and entry level Nordstrom customer slowed. Nordstrom Rack products must also be refocused on core brands, a reversion from its effort to broaden the assortment. The company is taking significant steps to improve profitability as evidenced by its exit from the Canadian market, changes to its Nordstrom Rack's strategy and improvements to its supply chain. Nordstrom Rack's strategy will include a refocus on new store development, key designer brands, and termination of the fulfillment of digital sales at its locations. Nordstrom's focus on fashion apparel and the secular challenges that face the department store industry remain credit challenges as well as its concentration in California. The company must also manage its vendor partners globally and navigate changing demographic, lifestyle and workplace trends which may ultimately impact purchasing patterns. The negative outlook reflects the risks that Nordstrom faces in stabilizing its market position, and expanding operating margins through cost containment, better inventory management, and supply chain efficiencies in the face of an uncertain economic environment. It also reflects the risk that its off-price business could remain volatile as its business strategy is modified. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded should Nordstrom consistently grow sales at both its full line and off-price segments and return operating margins to levels at least approaching what it achieved historically. Diversification as its off-price business grows would also be viewed favorably. An upgrade would require operating performance, margin improvements and leverage reductions such that EBIT to interest expense will be sustained above 5.0x and debt to EBITDA is sustained below 2.5x while maintaining very good liquidity. An upgrade would also require Nordstrom to maintain financial strategies that would support its credit metrics remaining at or better than these levels. Ratings could be downgraded should Nordstrom's operating margins not show improvement, its changes to its off-price strategy are not successful, financial strategies become more aggressive or liquidity weakens. Quantitatively, ratings could be downgraded if EBIT to interest expense is sustained below 3.0x and debt to EBITDA is sustained above 3.5x. Headquartered in Seattle, Washington, Nordstrom, Inc. is a leading fashion retailer based in the US and Canada. Nordstrom operates 358 full-line stores, Nordstrom Rack stores, clearance stores and Nordstrom Local service concept stores. Additionally, the company operates Nordstrom.com, Nordstrom.ca and Nordstromrack.com. Revenue for the latest twelve months ended January 28, 2023 was approximately $15.5 billion. Nordstrom is in the process of exiting the Canadian market. The principal methodology used in these ratings was Retail published in November 2021. NOVUSON SURGICAL: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Novuson Surgical, Inc. DBA Novuson 11824 N Creek Pkwy N, Ste 103 Bothell, WA 98011 Business Description: Novuson is developing its Direct Therapeutic Ultrasound (DTU) technology platform for coagulation and hemostatic control in surgical and trauma procedures. Chapter 11 Petition Date: April 21, 2023 Court: United States Bankruptcy Court Western District of Washington Case No.: 23-10728 Judge: Hon. Timothy W. Dore Debtor's Counsel: Aditi Paranjpye, Esq. CAIRNCROSS & HEMPELMANN, P.S. 524 Second Avenue Suite 500 Seattle, WA 98104 Tel: 206-587-0700 Fax: 206-587-2308 Email: aparanjpye@cairncross.com Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Stuart B. Mitchell as president. A full-text copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/I4FVRMY/Novuson_Surgical_Inc__wawbke-23-10728__0001.0.pdf?mcid=tGE4TAMA OBSTETRIC & GYNECOLOGIC: Seeks to Extend Plan Exclusivity --------------------------------------------------------- Obstetric and Gynecologic Associates of Iowa City and Coralville, P.C. asks the U.S. Bankruptcy Court for the Southern District of Iowa to extend its plan exclusivity period to a date that is no earlier that 30 days after the Court enters an order reversing the dismissal of the chapter 11 case, and to extend its solicitation period to a date that is 90 days after entry of the reversal order. The Debtor's current plan deadline is April 15, 2023. The Debtor stated that it was prepared to file a chapter 11 plan ahead of the current plan deadline. However, the Debtor said that before it could file its plan, on March 29, 2023, the Court entered an order and memorandum of decision dismissing the chapter 11 case. The same day, the Debtor filed its Motion for Stay Pending Appeal, seeking to stay the dismissal order while it pursues an appeal of the Court's decision. On April 3, 2023, the Debtor filed its notice of appeal of the dismissal order. The Debtor explained that because neither the stay motion nor the dismissal appeal will be finally decided prior to the current plan deadline, it is requesting the extension to maintain the status quo (and avoid prejudice to the Debtor and its estate) while the stay motion and dismissal appeal are pending. Obstetric and Gynecologic Associates of Iowa City and Coralville, P.C. is represented by: Kristina M Stanger, Esq. Roy R. Leaf, Esq. NYEMASTER GOODE, P.C. 700 Walnut St, Ste 1600 Des Moines, IA 50309-3899 Tel: (515) 283-8009 Email: kmstanger@nyemaster.com rleaf@nyemaster.com - and - Elizabeth B. Vandesteeg, Esq. Harold D. Israel, Esq. John R. O’Connor, Esq. LEVENFELD PEARLSTEIN, LLC 2 N. LaSalle St., Suite 1300 Chicago, IL 60602 Tel: (312) 346-8380 Email: evandesteeg@lplegal.com hisrael@lplegal.com joconnor@lplegal.com About Obstetric and Gynecologic Associates Obstetric and Gynecologic Associates of Iowa City and Coralville, P.C. -- https://www.obgyniowacity.com/ -- provides obstetric and gynecologic care services of women through Mercy Hospital in Coralville, Iowa. Obstetric and Gynecologic Associates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Iowa Case No. 22-01174) on Oct. 31, 2022. In the petition filed by Jill C. Goodman, as authorized officer, the Debtor listed assets between $500,000 and $1 million and liabilities between $50 million and $100 million. Judge Anita L. Shodeen oversees the case. The Debtor tapped Levenfeld Pearlstein, LLC and Nyemaster Goode, PC as legal counsels; and G2 Capital Advisors, LLC as restructuring advisor. Jeffrey T. Varsalone, managing director at G2 Capital, serves as the Debtor's chief restructuring officer. Stretto, Inc. is the claims, noticing and solicitation agent. ODYSSEY ACADEMY: S&P Rates 2023A/2023B School Revenue Bonds 'BB' ---------------------------------------------------------------- S&P Global Ratings assigned its 'BB' long-term rating to Arlington Higher Education Finance Corp., Texas' series 2023A and series 2023B charter school revenue bonds, to be issued for Odyssey Academy Inc. (OA). S&P also affirmed its 'BB' long-term rating on OA's series 2015A and 2015B tax-exempt education revenue bonds outstanding. The outlook is stable. "The rating reflects our view of OA's solid academic performance, steady charter standing with the authorizer, and historically improving financial operations," said S&P Global Ratings credit analyst Alexander Enriquez. S&P said, "The stable outlook reflects our expectation that OA's demand profile will continue to reflect stable-to-positive enrollment trends and continued favorable relationship with the authorizer. We expect fiscal 2023 lease-adjusted MADS coverage to be weak, below 1.0x, given the increased debt service related to the series 2023 bonds as well as softer operating performance, given a lower level of recognized federal stimulus funding, which has supported operating performance in previous years. In addition, we expect that liquidity will continue improving over the outlook period, given year-to-date results for fiscal 2023 and the potential for a gain on the sale of the current Bay Area campus. "We could consider a negative rating action if the school is unable to maintain lease-adjusted MADS coverage consistent with the rating, near-term enrollment doesn't meet expectations, days' cash on hand (DCOH) weakens, or if the school's operating performance materially weakens. Projections for fiscal 2023 are for MADS coverage of less than 1.0x, and then for coverage to improve in fiscal 2024, largely due to proceeds from the sale of the Bay Area campus. Should the sale of the campus not be successful, or should other events cause coverage to stay below 1.0x for multiple years, we could take a negative rating action. "Though not expected given the school's current debt issuance and weak liquidity, we could consider a positive rating action over time if the school achieves a trend of positive operating margins on a full-accrual basis, with improved lease-adjusted MADS coverage and growth in unrestricted reserves as a result of DCOH levels commensurate with a higher rating for a sustained period. We expect the school's demand profile will continue to reflect enrollment growth in line with targets, sufficient student retention, and good academics." ORIGINCLEAR INC: Widens Net Loss to $10.8 Million in 2022 --------------------------------------------------------- OriginClear, Inc. has filed with the Securities and Exchange Commission its Annual Report on Form 10-K disclosing a net loss of $10.79 million on $10.37 million of sales for the year ended Dec. 31, 2022, compared to a net loss of $2.12 million on $4.14 million of sales for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $6.35 million in total assets, $21.50 million in total liabilities, $10.87 million in commitments and contingencies, and a total shareholders' deficit of $26.02 million. Houston, TX-based M&K CPAS, PLLC, the Company's auditor since 2019, issued a "going concern" qualification in its report dated April 17, 2023, citing that the Company suffered a net loss from operations and used cash in operations, which raises substantial doubt about its ability to continue as a going concern. A full-text copy of the Form 10-K is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/0001419793/000121390023030192/f10k2022_originclear.htm About OriginClear Headquartered in Clearwater, Florida, Originclear, Inc. -- www.originclear.tech -- is a water technology company which has developed in-depth capabilities over its 14-year lifespan. Those technology capabilities have now been organized under the umbrella of OriginClear Tech Group. OriginClear, under the brand of OriginClear Tech Group, designs, engineers, manufactures, and distributes water treatment solutions for commercial, industrial, and municipal end markets. PANEVAS LLC: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Panevas LLC 5210 Webb Rd. Tampa, FL 33615 Business Description: Panevas owns in fee simple title a property located at 19206 US HWY. 19 N. and Harn Blvd., Clearwater, FL valued at $1 million. Chapter 11 Petition Date: April 21, 2023 Court: United States Bankruptcy Court Middle District of Florida Case No.: 23-01589 Debtor's Counsel: Stephenie Biernacki Anthony, Esq. ANTHONY & PARTNERS, LLC 100 South Ashley Drive Suite 1600 Tampa, FL 33602 Tel: 813-273-5616 Fax: 813-221-4113 Email: santhony@anthonyandpartners.com Total Assets: $1,011,963 Total Liabilities: $2,613,430 The petition was signed by Panayiotis Vasiloudes as co-manager. A full-text copy of the petition is available for free at PacerMonitor.com at: A full-text copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/BXMCYTY/Panevas_LLC__flmbke-23-01589__0001.0.pdf?mcid=tGE4TAMA PARTY CITY: April 28 Auction Set for Nine Additional Store Leases ----------------------------------------------------------------- A&G Real Estate Partners, real estate advisor to Party City Holdco Inc. in its expedited financial restructuring, on April 20 announced plans to offer nine additional Party City leases in a Friday, April 28 auction, for which bid procedures were recently approved by the U.S. Bankruptcy Court for the Southern District of Texas. The bid deadline is Monday, April 24. New York-based A&G also announced the results of the April 14 auction conducted by A&G at which national retailers Michaels and Five Below together acquired five Party City leases. Michaels acquired four leases—in Corpus Christi and Dallas, Texas; Alexandria, Louisiana; and Irondequoit, New York—and Five Below acquired a lease in Alameda, California. The auction results are pending Bankruptcy Court approval. A&G remains engaged with landlords to support PCHI's real estate optimization strategy. The latest round of leases, made available after terms were not reached with the respective landlords, includes nine additional locations in: -- California (Marina, Palmdale, Lodi) -- Indiana (Noblesville) -- New York (Bronx, Staten Island) -- Ohio (Lancaster) -- Oklahoma (Midwest City) -- Michigan (Walker) The newly available locations range in size from 10,000 to 21,000 square feet. Some are freestanding, while others are in power centers, strips, or city street locations. Potential users include gyms, dollar stores, local retail operators, furniture users, local specialty retailers, and non-retail users such as medical office clinics. For additional details, including bid procedures as well as remaining lease terms for individual locations, contact A&G Senior Managing Director Mike Matlat, (631) 465-9508, mike@agrep.com, or A&G Managing Director Alexandra Graiser, (631) 465-9514, alexandra@agrep.com. The full store list is available here: https://www.agrep.com/index.php/party-city About Party City Holdco Party City Holdco, Inc. (NYSE: PRTY) is the global leader in the celebrations industry, with its offerings spanning more than 70 countries around the world. It is also the largest designer, manufacturer, distributor and retailer of party goods in North America. Party City Holdco had 761 company-owned stores as of September 2022 and is headquartered in Woodcliff Lake, N.J., with additional locations throughout the Americas and Asia. Party City Holdco and its domestic subsidiaries sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. 23-90005) on Jan. 17, 2023. As of Sept. 30, 2022, Party City Holdco had total assets of $2,869,248,000 against total debt of $3,022,960,000. Judge David R. Jones oversees the cases. The Debtors tapped Paul, Weiss, Rifkind, Wharton & Garrison, LLP as legal counsel; Moelis & Company, LLC as investment banker; AlixPartners, LLP as financial advisor; A&G Realty Partners as real estate advisor; and Kroll as the claims agent. PricewaterhouseCoopers LLP (PwC) provides accounting and valuation advisory services, tax-related services, and internal audit Sarbanes-Oxley Act support services. Davis Polk & Wardwell, LLP and Lazard serve as legal counsel and investment banker, respectively, to the ad hoc group of first lien holders. The U.S. Trustee for Region 6 appointed an official committee to represent unsecured creditors in the Debtors' Chapter 11 cases. The committee is represented by Pachulski Stang Ziehl & Jones, LLP. PLX PHARMA: Files for Chapter 11 to Sell to Greenwood ----------------------------------------------------- Seeking Alpha reports that PLx Pharma (NASDAQ:PLXP) on Wednesday, April 12, 2023, said it intended to file for bankruptcy and had entered into a stalking horse asset purchase deal to sell its drug-delivery platform and brand of aspirin capsules. The company said it had struck the stalking horse deal with PLx Acquisition Co, a unit of the buyer Greenwood Brands LLC. The assets to be put up for sale include the company's clinically-validated drug delivery platform PLxGuard and its FDA-approved aspirin capsules Vazalore. PLXP filed for bankruptcy in Delaware on April 13, 2023. As per the stalking horse deal, the purchase price consists of $100,000 in cash, a credit bid of $3 million and the assumption of certain liabilities by Greenwood Brands. PLXP's announcement on Wednesday comes after a sustained recent run of weak financial performances. In November 2022, the company reported Q3 revenue that cratered more than 90% Y/Y. On Tuesday, April 11, 2023, the company was notified that its securities would be delisted from Nasdaq on April 13, 2023. About PLx Pharma PLx Pharma Inc. and PLx Opco Inc. are a commercial-stage drug delivery platform technology company, focused on improving how and where active pharmaceutical ingredients are absorbed in the gastrointestinal tract, via its clinically-validated and patent-protected PLxGuard technology. PLx Pharma Inc. and PLx Opco filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10456) on April 13, 2023. The petitions were signed by Lawrence Perkins as chief restructuring officer. The Hon. Mary F. Walrath oversees the cases. As of Dec. 31, 2022, the company had $21,750,000 in total assets against $12,285,000 in total liabilities. Lawyers at Olshan Frome Wolosky LLP and Young Conaway Stargatt & Taylor LLP serve as counsel to the Debtors; SierraConstellation Partners serves as CRO Provider; Donlin, Recano & Company serves as notice, claims, solicitation & balloting agent. PRESTIGE CONSTRUCTION: Continued Operations to Fund Plan -------------------------------------------------------- Prestige Construction Group of Texas, LLC, filed with the U.S. Bankruptcy Court for the Eastern District of Texas a Plan of Reorganization dated April 18, 2023. The Debtor operates a construction company in North Texas. The Debtor focuses primarily on residential remodeling projects. Many of these projects require approval from the Homeowners Association ("HOA"). The Debtor began experiencing problem in the late summer and fall of 2022. The Debtor was delayed in completing many projects by weather, labor and material shortages and the inability to timely received approval for projects from either the HOA or the local permitting office. This bankruptcy was filed to attempt a request prioritize the remaining contract and complete those jobs which the Debtor would be able to complete and provide a dividend to those customers whose projects would not be completed. The Debtor will continue in business. The Debtor's Plan will break the existing claims into 5 categories of Claimants. These claimants will receive cash payments over a period of time beginning on the effective date. Class 4 shall consist on all creditors with claims for projects that the Debtor has not completed as of the date of this Plan. The Class 4 creditors will have the option of being a Class 4-A creditors or a Class 4-B creditor. The Debtor's Plan is dependent of a sufficient number of Class 4 creditors electing to proceeding as a Class 4-A creditor. In the event the Debtor does not obtain the consent of 75% of the Class 4 Creditors to elect to be treated as a Class 4-A creditor will be withdrawn. All creditors electing to be treated as a Class 4-A creditor shall have their existing projects completed by the Debtor, however, the Class 4-A Creditors must provide the Debtor with an additional deposit in the amount of 50% of the remaining balance on their contract. The Class 4-A creditors will be required to pay the remaining 50% of their contracts upon competition of their project. Any Class 4 creditor who does not elect to be a Class 4-A creditor will be treated as a Class 4-B creditor. All other creditors of the Debtor who do not elect to be treated as Class 4-A creditors shall be Class 4-B creditors. All Class 4-B creditors shall share pro rata in the unsecured creditors pool. The unsecured Class 4-B creditors pool shall be determined based upon the funds available from the Class 4-A projects. The Debtor shall make 36 payments into the unsecured creditors pool. The Class 4-A and 4-B creditors are impaired. Class 5 consists of Current Owner. The current owner will receive no payments under the Plan, however, he will be allowed to retain his ownership in the Debtor. Class 5 Claimants are not impaired under the Plan. Debtor anticipates the continued operations of the business to fund the Plan. Proposed Attorneys for Debtor: Eric A. Liepins, Esq. Eric A. Liepins, PC 12770 Coit Road, Suite 850 Dallas, TX 75251 Tel: (972) 991-5591 Fax: (972) 991-5788 Email: eric@ealpc.com About Prestige Construction Group of Texas Prestige Construction Group of Texas, LLC, a company in Prosper, Texas, filed its voluntary petition for Chapter 11 protection (Bankr. E.D. Tex. Case No. 23-40170) on Jan. 31, 2023, with up to $50,000 in assets and $1 million to $10 million in liabilities. Cory Anderson, managing member of Prestige, signed the petition. Judge Brenda T. Rhoades oversees the case. Eric A. Liepins, PC, serves as the Debtor's legal counsel. QUALITY HEATING: Gets OK to Hire Epiq as Claims and Noticing Agent ------------------------------------------------------------------ Quality Heating & Air Conditioning Company, Inc. received approval from the U.S. Bankruptcy Court for the District of Delaware to employ Epiq Corporate Restructuring, LLC as its claims and noticing agent. Epiq will oversee the distribution of notices and will assist in the maintenance, processing, and docketing of proofs of claim filed in the Chapter 11 case of the Debtor. The hourly rates of Epiq's professionals are as follows: Clerical/Administrative Support $25 – $55 IT/Programming $55 – $85 Project Managers/Consultants/Directors $85 – $175 Solicitation Consultant $175 Executive Vice President, Solicitation $195 In addition, Epiq will seek reimbursement for expenses incurred. Kate Mailloux, a senior director at Epiq Corporate Restructuring, disclosed in a court filing that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Kate Mailloux Epiq Corporate Restructuring, LLC 777 Third Avenue, 12th Floor New York, NY 10017 Telephone: (646) 282-2532 Email: kmailloux@epiqglobal.com About Quality Heating & Air Conditioning Company Quality Heating & Air Conditioning Company, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 23-10354) on March 27, 2023, listing up to $50 million in both assets and liabilities. Judge Karen B. Owens oversees the case. The Debtor tapped Gellert Scali Busenkell & Brown, LLC as legal counsel and SC&H Group, Inc. as investment banker. Epiq Corporate Restructuring, LLC is the claims and noticing agent. R1 RCM: Fitch Alters Outlook on 'BB' LongTerm IDR to Positive ------------------------------------------------------------- Fitch Ratings has affirmed the Long-Term Issuer Default Rating (IDR) of R1 RCM Inc. (R1) at 'BB'. The Rating Outlook is revised to Positive from Stable. Fitch has also affirmed the company's term loan B rating at 'BBB-'/'RR1'. Fitch views the 'BB' rating as supported by secular tailwinds benefitting the company, a reliable growth trajectory, low cyclicality and strong industrial logic for the acquisition of Cloudmed. While the lack of financial policy needed to ensure flexibility in delivering shareholder value continues to remain a constraint, the Positive Outlook reflects Fitch's increased confidence in the company maintaining a conservative financial policy and improved customer diversification following the Cloudmed acquisition. Other constraints on the rating include the governance structure with joint ownership by Ascension and TowerBrook, and customer concentration. KEY RATING DRIVERS Secular Tailwinds: Fitch expects R1 to benefit from underlying secular trends in U.S. health care spending. The Centers for Medicare and Medicaid Services (CMS) forecasts national health expenditure growth of 5.1% per annum through 2030 due to longstanding trends in medical procedure/drug cost and utilization growth. Also, efforts to digitize health records, increasing regulatory burdens, overall medical billing complexity and other cost pressures have created a need for an end-to-end Revenue Cycle Management (RCM) solution. R1's outsourced RCM offerings deliver this end-to-end solution by leveraging their own experienced billing/coding staff and utilizing a software platform that integrates the various RCM software tools, providing increased efficiency through improved accuracy and use of automation. As a result, external spend by providers on RCM solutions is forecast to grow 11.6% per annum through 2030, according to Research and Markets, creating a strong tailwind for adoption of R1's solutions. Growth Prospects: Fitch expects R1 to maintain a reliable organic growth profile. R1's contingent fee pricing model results in strong correlation with the underlying secular growth in U.S. healthcare spending. In addition, Fitch notes greater than $20 billion of net patient revenue (NPR) is in the onboarding phase, providing multi-year runway for sustained growth given the company's improved capacity to implement $9 billion of new NPR per annum. Growth prospects are further supported by strong retention rates resulting from an average remaining contract life for end-to-end customers of 7+ years and high switching costs that include staff training, implementation costs, business interruption risks and reduced productivity when swapping vendors. Fitch believes that the secular tailwinds and high switching costs produce a dependable growth trajectory that benefits the credit profile. Low Cyclicality: Closely related to the underlying health care expenditure secular growth driver, Fitch expects R1 to exhibit low cyclicality for the foreseeable future. Fitch believes the company's pricing model ensures strong correlation to overall U.S. health care spending, which is highly non-discretionary and has experienced uninterrupted growth since at least 2000 according to CMS. As a result, Fitch believes R1 will demonstrate a stable credit profile with little sensitivity to macroeconomic cycles. Recent Transaction: The Cloudmed acquisition supports R1's strategy to increase efficiency, accuracy, automation and revenue for customers' RCM needs. The acquisition brings leading software capabilities in recovering reimbursements from commercial and government payors that may have been lost due to processing or billing inaccuracies, incorrect denials, complexity or aged receivables. Fitch believes these services fulfill increasingly important client needs in maximizing collections given the noted pressures on profitability. The deal also facilitates R1's increased penetration into the large hospital client segment and presents meaningful opportunities for cross-selling into the respective client bases. Financial Policy: R1 does not maintain a formal financial policy commitment. However, Fitch expects management to take a conservative posture with regards to financial leverage as the company is in the early stages of its growth opportunity. Fitch forecasts FY23 gross leverage at 2.9x, declining to 2.2x by FY24 through a combination of voluntary debt paydowns, 5% scheduled amortization rate on the term loan A and EBITDA growth. Fitch does not expect the company to adopt a formal financial policy given desired flexibility to maximize long-term shareholder value through organic growth, acquisitions or share buybacks, indicative of the 'BB' rating category. Governance Structure: Ascension Health Alliance (AA+/Stable), the nation's largest Catholic and non-profit health system, along with TowerBrook Capital Partners, jointly own approximately 30% of the company. Further, New Mountain Capital holds approximately 30% of outstanding shares on a diluted basis. Ascension and TowerBrook Capital Partners, an investment management firm, made a joint investment in R1 in 2016. R1 will serve as the exclusive provider of RCM services for hospitals affiliated with Ascension. Fitch believes the ownership concentration introduces potential concerns regarding board independence and effectiveness but notes no prior record of governance failings. Customer Concentration: R1 derives a significant portion of its revenue from two customers. In particular, Ascension and Intermountain Healthcare represented 49% and 12% of FY22 revenue, respectively. Ascension serves as a strong reference customer for R1's salesforce ability to win new logos. Ascension, Towerbrook along with affiliates of New Mountain Capital are major owners of R1 and are expected to have aligned interests. However, the magnitude of the concentration introduces risk of severe credit profile degradation should the nature of the relationship change in the future. Fitch, however, notes that the Ascension contract was renewed in May 2021 for a 10-year term. Fitch typically views material customer concentration as representative of the 'BB' rating category. DERIVATION SUMMARY Fitch expects R1 will benefit from a reliable growth path with a pricing model that creates close correlation to the underlying secular growth in U.S. health care expenditures and a robust pipeline of contract wins expected to be implemented over the forecast horizon. Fitch expects R1 to exhibit minimal cyclicality and durable resistance to economic cycles. This is due to the non-discretionary nature of health care spend persisting, strong client retention rates and average remaining contract lives for end-to-end customers of 7+ years. Other considerations are high switching costs and pent-up demand for end-to-end RCM solutions as significant room is available to penetrate the market. Fitch compares R1 to health care IT peers such as RCM providers athenahealth Group, Inc. (B/Negative), Finthrive Software Intermediate Holdings, Inc. dba nThrive (B-/Stable) and Waystar Technologies, Inc. (B/Stable). Fitch's forecast for R1's FY23 leverage of 2.9x is well below the 5.0x-11.5x range for Fitch-rated health care IT issuers. Profitability metrics are mixed in comparison with peers with Fitch forecasting EBITDA margins of 26%-28%, which is below the 33% average for Fitch-rated health care IT peers due to R1's higher labor component in offerings. However, Fitch expects consistent FCF margins as a percent of revenues in the low-mid teens, above the levels of peers, due to a lower interest burden. Peers are predominantly private-equity owned and are more aggressively capitalized than the publicly-traded R1. Fitch believes strong FCF will be sustainable due to the low cyclicality of the business, strong customer retention, reliable growth and low capital intensity. Fitch views the 'BB' rating as supported by secular tailwinds benefitting the company, a reliable growth trajectory, low cyclicality and strong industrial logic for the acquisition of Cloudmed. While the lack of financial policy needed to ensure flexibility in delivering shareholder value continues to remain a constraint, the Positive Outlook reflects Fitch's increased confidence in the company maintaining a conservative financial policy and improved customer diversification following the Cloudmed acquisition. Other constraints include the governance structure with joint ownership by Ascension and TowerBrook, and the customer concentration. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer - Organic revenue growth assumed in low teens over the forecast horizon as the company continues to benefit from onboarding new NPR from recent contract wins and high-teens growth expected from Cloudmed; - EBITDA margins assumed at 26.5% for 2023 due to 12 months addition of higher margin Cloudmed revenue increasing to high 20s over the rating horizon due to gradual achievement of identified synergies, savings from automation and operating leverage; - Capex/Sales at 5.5% over the forecast horizon; - Fitch assumes close to $160 million in voluntary debt paydowns apart from scheduled amortization payments over the forecast horizon; - Fitch assumes aggregate acquisitions of about $700 million funded with a combination of incremental debt and cash on balance sheet; - Fitch assumes aggregate $200 million in share buybacks over the forecast period. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Fitch's expectation of EBITDA leverage sustaining below 2.5x; - Increased customer diversification; - Improved governance structure such that Ascension/TowerBrook no longer exercise effective control. Factors that could, individually or collectively, lead to negative rating action/downgrade: - EBITDA leverage sustained above 3.5x; - (CFO-Capex)/Total Debt with Equity Credit sustained below 15%; - Sustained loss of market share or underperformance relative to guidance and forecasts. LIQUIDITY AND DEBT STRUCTURE Fitch expects R1 to maintain abundant liquidity throughout the forecast horizon given strong FCF margins, a highly variable cost structure, and moderate liquidity requirements. As of fiscal 2022, liquidity is comprised of a $600 million RCF with $100 million drawn and $110.1 million readily available cash balance. Liquidity is further supported by Fitch's forecast of the company generating FCF margins as high as low teens percent over the forecast horizon. ISSUER PROFILE R1 RCM manages health care revenue cycle operations for health systems, hospitals and physician groups. ESG CONSIDERATIONS R1 has an ESG Relevance Score of '4' for Governance Structure due to concentrated joint ownership by Ascension and TowerBrook, which are beneficially own about 30% of the common equity. Ascension will remain a material customer representing less than 40% of pro forma revenue, which has 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 ----------- ------ -------- ----- R1 RCM Inc. LT IDR BB Affirmed BB senior secured LT BBB- Affirmed RR1 BBB- REMARK HOLDINGS: Swings to $55.5 Million Net Loss in 2022 --------------------------------------------------------- Remark Holdings, Inc. has filed with the Securities and Exchange Commission its Annual Report on Form 10-K disclosing a net loss of $55.48 million on $11.67 million of revenue for the year ended Dec. 31, 2022, compared to net income of $27.47 million on $15.99 million of revenue for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $14.44 million in total assets, $34.86 million in total liabilities, and a total stockholders' deficit of $20.42 million. Los Angeles, California-based Weinberg & Company, P.A., the Company's auditor since 2020, issued a "going concern" qualification in its report dated April 17, 2023, citing that the Company has suffered recurring losses from operations and negative cash flows from operating activities and has a negative working capital and a stockholders' deficit that raise substantial doubt about its ability to continue as a going concern. Management Commentary "In the fourth quarter of 2022, the world refocused its attention on how powerful artificial intelligence can be and on its ability to change the world. Over the last eight years, we have built our award-winning AI platform from the ground up, and now we can be proud that our team has made us one of the leaders in artificial intelligence, specifically in computer vision," noted Kai-Shing Tao, chairman and chief executive officer of Remark Holdings. "While operating under the strict Covid lockdowns in China, 2022 was a transition year where we successfully diversified our business primarily to the U.S. and the United Kingdom, where we will reap the benefits in 2023. Our recently-won customers and strategic partners like Genetech and Milestone attest to our ability to deploy our AI-based solutions to help businesses run more effectively and efficiently and provide an immediate ROI. In 2023, you will see our team continue to deliver with new customers, to expand our business with existing customers, to expand into Latin America and the Middle East, and to build and create cutting-edge AI technology that makes a real difference." A full-text copy of the Form 10-K is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/0001368365/000136836523000023/mark-20221231.htm About Remark Holdings Remark Holdings, Inc. (NASDAQ: MARK) -- http://www.remarkholdings.com-- delivers an integrated suite of AI solutions that help organizations monitor, understand, and act on threats in real-time. Remark consists of an international team of sector-experienced professionals that have created video analytics. The Company's GDPR-compliant and CCPA-compliant solutions focus on market sectors including retail, federal and state governmental entities, public safety, hospitality, and transportation. The company's headquarters are in Las Vegas, Nevada, USA, with operational offices in New York and international offices in London, England. RENNOVA HEALTH: Posts $334.2 Million Net Loss in 2022 ----------------------------------------------------- Rennova Health, Inc. has filed with the Securities and Exchange Commission its Annual Report on Form 10-K disclosing a net loss available to common stockholders of $334.17 million on $13.04 million of net revenues for the year ended Dec. 31, 2022, compared to a net loss available to common stockholders of $500.87 million on $3.22 million of net revenues for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $20.57 million in total assets, $49.67 million in total liabilities, and a total stockholders' deficit of $29.09 million. Salt Lake City, Utah-based Haynie & Company, the Company's auditor since 2018, issued a "going concern" qualification in its report dated April 17, 2023, citing that the Company has recognized recurring losses and negative cash flows from operations. This raises substantial doubt about the Company's ability to continue as a going concern. The Company had a working capital deficit of $42.9 million at Dec. 31, 2022. The Company had a loss from continuing operations of approximately $3.3 million and $5.3 million for the years ended Dec. 31, 2022 and 2021, respectively, and cash used in its operating activities was $0.2 million and $8.9 million for the years ended Dec. 31, 2022 and 2021, respectively. As of April 17, 2023, the Company's cash is deficient and payments for its operations in the ordinary course are not being made. The Company said the continued losses and other related factors, including past due accounts payable and payroll taxes as well as payment defaults under the terms of certain outstanding notes payable and debentures raise substantial doubt about the Company's ability to continue as a going concern for 12 months from the filing date of this report. A full-text copy of the Form 10-K is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/931059/000149315223012549/form10-k.htm About Rennova Health Rennova Health, Inc. -- http://www.rennovahealth.com-- is a provider of health care services. The Company owns one operating hospital in Oneida, Tennessee, a hospital located in Jamestown, Tennessee that it plans to reopen and operate and a rural health clinic in Kentucky. The Company's operations consist of only one segment. REVLON INC: Settlement With DOJ Appeal Clears Way for Ch. 11 Exit ----------------------------------------------------------------- Jeremy Hill of Bloomberg News reports that Revlon Inc. settled a dispute with a Justice Department unit over the payment of certain professional fees in its restructuring, putting the cosmetics maker in position to exit bankruptcy on April 28, 2023. The US Trustee, which monitors bankruptcy court, moved to appeal a sliver of Revlon Inc.'s Chapter 11 bankruptcy plan in recent days. The agency said the appeal wouldn't interfere with Revlon's restructuring, but the company and its creditors disagreed. The company has now resolved the US Trustee's concerns by making "non-material" modifications to its bankruptcy plan and the appeal will be withdrawn, a lawyer for Revlon said. About Revlon Inc. Revlon Inc. manufactures, markets and sells an extensive array of beauty and personal care products worldwide, including color cosmetics; fragrances; skin care; hair color, hair care and hair treatments; beauty tools; men's grooming products; antiperspirant deodorants; and other beauty care products. Today, Revlon's diversified portfolio of brands is sold in approximately 150 countries around the world in most retail distribution channels, including prestige, salon, mass, and online. Since its breakthrough launch of the first opaque nail enamel in 1932, Revlon has provided consumers with high-quality product innovation, performance and sophisticated glamour. In 2016, Revlon acquired the iconic Elizabeth Arden company and its portfolio of brands, including its leading designer, heritage and celebrity fragrances. Revlon is among the leading global beauty companies, with some of the world's most iconic and desired brands and product offerings in color cosmetics, skin care, hair color, hair care and fragrances under brands such as Revlon, Revlon Professional, Elizabeth Arden, Almay, Mitchum, CND, American Crew, Creme of Nature, Cutex, Juicy Couture, Elizabeth Taylor, Britney Spears, Curve, John Varvatos, Christina Aguilera and AllSaints. Revlon sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 22-10760) on June 15, 2022. Fifty affiliates, including Almay, Inc, Beautyge Brands USA, Inc., and Elizabeth Arden, Inc., also sought bankruptcy protection on June 15 and June 16, 2022. Revlon disclosed total assets of $2,328,093,000 against total liabilities of $3,689,240,395 as of April 30, 2022. The Hon. David S. Jones is the case judge. The Debtors tapped Paul, Weiss, Rifkind, Wharton & Garrison, LLP as bankruptcy counsel; Mololamken, LLC, as special litigation counsel; PJT Partners, LP as investment banker; KPMG, LLP as tax services provider; and Alvarez & Marsal North America, LLC as restructuring advisor. Robert M. Caruso and Matthew Kvarda of Alvarez & Marsal serve as the Debtors' chief restructuring officer and interim chief financial officer, respectively. Meanwhile, Kroll Restructuring Administration, LLC, is the Debtors' claims agent and administrative advisor. The U.S. Trustee for Region 2 appointed an official committee of unsecured creditors on June 24, 2022. Brown Rudnick, LLP, Province, LLC, and Houlihan Lokey Capital, Inc., serve as the committee's legal counsel, financial advisor and investment banker, respectively. RICH'S DELICATESSEN: Amends SBA & IRS Secured Claims Pay Details ---------------------------------------------------------------- Rich's Delicatessen & Liquors, Inc., submitted a Second Amended Plan of Reorganization for Small Business under Subchapter V dated April 18, 2023. This Plan of Reorganization proposes to pay creditors of the Debtor from an infusion of sufficient capital from its sole shareholder. The Plan provides for payment of one class of priority claims and one class of general unsecured nonpriority claims. Both priority and non-priority unsecured creditors holding allowed claims will receive payment, upon the Effective Date of the Plan 100% of their Claim which will made by Eduardo Izzi as the disbursing agent on behalf of the Debtor if the Plan is consensual. If this is not a consensual plan, the distributions will be made by the Subchapter V Trustee, Neema T Varghese. This Plan also provides for the payment of administrative claims. The Plan does not provide for any payments or distributions to the holder of the equity interest. Class 1 consists of the Secured Claims of the Small Business Administration ("SBA") and the Internal Revenue Service. Class 1 Secured Claim of the SBA shall be paid in accordance with the terms of the loan. The Class 1 Secured Claim of the Internal Revenue Service shall be paid within 90 days from the Effective Date of the 2nd Amended Plan. Class 3 consists of General Unsecured Non-Priority Claims. General Unsecured Non-Priority Claims aggregate approximately $57,129.60 as set forth on the Unsecured Non-Priority Claims Register. Class 4 consists of Equity Interest. No property or other consideration will be paid or distributed to the holder, Kathy Machnicki, who will retain his 100% stock ownership of the Debtor. This Plan is self-executing. The Debtor shall not be required to execute any newly created documents to evidence the claims, liens or terms of repayment to the holder of an Allowed Claim. The Plan shall be funded by the infusion of sufficient capital from its sole shareholder, Kathy Machnicki, to entirely fund the Plan within 90 day from the Effective Date. A full-text copy of the Second Amended Plan of Reorganization dated April 18, 2023 is available at https://bit.ly/3N4VAXG from PacerMonitor.com at no charge. Attorneys for the Debtor: David R. Herzog, Esq. Law Office of David R. Herzog, LLC 53 West Jackson St., Suite 1442 Chicago, IL 60604 Telephone: (312) 977-1600 Email: drh@dherzoglaw.com About Rich's Deli Rich's Food & Liquors, Inc., and Rich's Delicatessen & Liquors, Inc. are family-owned and operated specialty European grocery stores. Both stores feature mostly European and Polish products. Rich's Food store is located at 4747 N Harlem Ave., Harwood Heights, Ill., while Rich's Deli store is located at 857 N Western Ave., Chicago, Ill. Rich's Food & Liquors, Inc., and Rich's Delicatessen & Liquors Inc. each filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 22 13563 and 22-13693) on Nov. 28, 2022. In the petitions filed by their manager, Mark Allen, Rich's Food disclosed $1 million to $10 million in both assets and liabilities while Rich's Deli reported $100,000 to $500,000 in assets and $500,000 to $1 million in liabilities. Judge Jacqueline P. Cox oversees the cases. The Debtors are represented by David R. Herzog, Esq., at the Law Office of David R. Herzog, LLC. RICH'S FOOD: Amends Plan to Include IRS Secured Claim Pay --------------------------------------------------------- Rich's Food & Liquors, Inc., submitted a Second Amended Plan of Reorganization for Small Business under Subchapter V dated April 18, 2023. This Plan of Reorganization proposes to pay creditors of the Debtor from an infusion of sufficient capital from its sole shareholder. The Plan provides for payment of one class of priority claims and one class of general unsecured nonpriority claims. Both priority and non-priority unsecured creditors holding allowed claims will receive payment, upon the Effective Date of the Plan 100% of their Claim which will made by Eduardo Izzi as the disbursing agent on behalf of the Debtor if the Plan is consensual. If this is not a consensual plan, the distributions will be made by the Subchapter V Trustee, Neema T Varghese. This Plan also provides for the payment of administrative claims. The Plan does not provide for any payments or distributions to the holder of the equity interest. Class 1 Secured Claim of the Internal Revenue Service shall be paid, in full, in cash, within 90 days from the Effective Date of the Plan. Class 2 Priority Claims shall be paid, in full, in cash, within 90 days from the Effective Date of the Plan. Class 3 consists of General Unsecured Non-Priority Claims. General Unsecured Non-Priority Claims aggregate $460,326.37 as set forth on the Unsecured Non-Priority Claims Register. This Plan is self-executing. The Debtor shall not be required to execute any newly created documents to evidence the claims, liens or terms of repayment to the holder of an Allowed Claim. The Plan shall be funded by the infusion of sufficient capital from its sole shareholder, Kathy Machnicki, to entirely fund the Plan on its Effective Date. A full-text copy of the Second Amended Plan of Reorganization dated April 18, 2023 is available at https://bit.ly/3AqjK7q from PacerMonitor.com at no charge. Attorneys for the Debtor: David R. Herzog, Esq. Law Office of David R. Herzog, LLC 53 West Jackson St., Suite 1442 Chicago, IL 60604 Telephone: (312) 977-1600 Email: drh@dherzoglaw.com About Rich's Deli Rich's Food & Liquors, Inc., and Rich's Delicatessen & Liquors, Inc. are family-owned and operated specialty European grocery stores. Both stores feature mostly European and Polish products. Rich's Food store is located at 4747 N Harlem Ave., Harwood Heights, Ill., while Rich's Deli store is located at 857 N Western Ave., Chicago, Ill. Rich's Food & Liquors, Inc., and Rich's Delicatessen & Liquors Inc. each filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 22-13563 and 22-13693) on Nov. 28, 2022. In the petitions filed by their manager, Mark Allen, Rich's Food disclosed $1 million to $10 million in both assets and liabilities while Rich's Deli reported $100,000 to $500,000 in assets and $500,000 to $1 million in liabilities. Judge Jacqueline P. Cox oversees the cases. The Debtors are represented by David R. Herzog, Esq., at the Law Office of David R. Herzog, LLC. RWDY INC: Seeks to Extend Plan Exclusivity to July 19 ----------------------------------------------------- RWDY, Inc. asks the U.S. Bankruptcy Court for the Western District of Louisiana to extend the exclusive period under which it may file a plan of reorganization to July 19, 2023, and to September 18, 2023 to confirm its Chapter 11 plan. The current deadline for the Debtor to file its Chapter 11 plan and disclosure statement is April 20, 2023. Its exclusivity period to confirm a plan expires June 19, 2023. The Debtor explained that its exclusivity period to file a plan will expire prior to any resolution of the claims controvercy between the Merchant Cash Advance Lenders and the Debtor or the resolution of a claims estimation motion likely to be filed by the Debtor. "Termination of exclusivity could result in competing plans, undue expense, and no corresponding benefit to the unsecured creditors," said the Debtor. RWDY, Inc. is represented by: Robert W. Raley, Esq. ROBERT W. RALEY ESQ 290 Benton Spur Road Bossier City, LA 71111 Tel: (318) 747-2230 Email: rwr@robertraleylaw.com - and - Curtis R. Shelton, Esq. AYRES, SHELTON, WILLIAMS, BENSON & PAINE, LLC Suite 1400, Regions Tower 3333 Texas Street Shreveport, LA 71166-1764 Tel: (318) 227-3500 Email: curtisshelton@arklatexlaw.com About RWDY Inc. RWDY Inc. -- https://www.rwdyinc.com/ -- is an oil and energy company based out of 1302 Dekort St, Copperas Cove, Texas. RWDY filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. La. Case No. 22-11308) on Dec. 21, 2022, with $10 million to $50 million in both assets and liabilities. Mark Allen, RWDY manager, signed the petition. Judge John S. Hodge oversees the case. The Debtor tapped Robert W. Raley, Esq., at Ayres, Shelton, Williams, Benson & Paine, LLC as legal counsel, and Postlethwaite & Netterville, APAC as accountant. SAN JORGE CHILDREN'S: Seeks to Extend Filing Period by 21 Days -------------------------------------------------------------- San Jorge Children's Hospital, Inc. asks the U.S. Bankruptcy Court for the Distirct of Puerto Rico for an extension of 21 days to file its Disclosure Statement and Plan of Reorganization. The Debtor stated that its efforts are being focused on advancing the development of a conditional asset purchase agreement and biding procedures that are intended to be submitted to the Court and parties in interest. The Debtor explained that having the intended conditional asset purchase agreement in a more complete stage will allow it to fully submerge itself in negotiations with its secured creditor as to how net proceeds of the sale of the Debtor's assets will be distributed among the estate and its creditors. The Debtor also pointed out that while it is significantly advanced in the draft of the Disclosure Statement and the Plan of Reorganization, having these documents in a more advance or final stage will allow it to fully disclose them together or significantly close with the filing of the Disclosure Statement and the Plan, or even incorporate them within these filings. About San Jorge Children's Hospital San Jorge Children's Hospital, Inc. operates a hospital specializing in pediatrics in San Juan, P.R. San Jorge Children's Hospital filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 22-02630) on Sept. 1, 2022, with between $10 million and $50 million in both assets and liabilities. Edward P. Smith, chief operating officer, signed the petition. Judge Maria De Los Angeles Gonzalez presides over the case. The Debtor tapped Wigberto Lugo Mender, Esq., at Lugo Mender Group, LLC as bankruptcy counsel and Galindez, LLC as external auditor. Cardona Jimenez Law Offices, P.S.C. represents the official committee of unsecured creditors appointed in the Debtor's case. SAS AB: Delays $26.4 Million Bond Interest Payment -------------------------------------------------- SAS AB (publ) said April 13, 2023, that it will defer the interest payments due April 24 and 26, 2023, respectively, on its perpetual capital securities, as part of the Company's SAS FORWARD plan and voluntary chapter 11 process in the U.S. The deferral of interest payment is made in accordance with the terms and conditions for the respective capital securities. This means that SAS defers the approximately SEK 56.3 million semi-annual interest payment due April 24, 2023 on its outstanding SEK 1,615 million perpetual capital securities with ISIN SE0014957999, and the approximately SEK 216.4 million semi-annual interest payment due April 26, 2022 on its in aggregate outstanding SEK 6,000 million subordinated perpetual capital securities with ISIN SE0014958005 and SE0014958013. DIP Term Loan SAS AB announced April 17, 2023, that it will not be utilizing the second tranche of its debtor-in-possession ("DIP") term loan during the second quarter of fiscal year 2023, as previously communicated. Following a stronger than expected development of SAS' liquidity position during the winter, SAS has no near-term need for additional liquidity through the second tranche of the DIP term loan. SAS may, depending on the continued development of SAS' liquidity position, continue discussions with Apollo Global Management regarding access to the second tranche of the DIP term loan at a later stage during the chapter 11 process. In the meantime, the Company will continue to pursue other normal course financing initiatives that if closed, will supplement the Company's liquidity at a lower all-in cost than a near-term utilization of the second tranche of the DIP term loan. On August 14, 2022, SAS entered into a DIP term loan agreement for USD 700 million (the equivalent of approximately SEK 7.0 billion), with funds managed by Apollo Global Management ("Apollo"). DIP financing is a specialized type of bridge financing used by businesses that are restructuring through a chapter 11 process. The DIP term loan agreement is divided in two tranches of equal size, of which SAS utilized the first tranche in September 2022. Following a stronger than expected development of SAS' liquidity position during the winter, SAS has no near-term need for additional liquidity through the second tranche of the DIP term loan. The Company sees opportunities to supplement its liquidity position at a lower all-in cost than a near-term utilization of the second tranche of the DIP term loan. As previously disclosed on April 6, 2023, SAS also started a competitive and broad equity solicitation process that is expected to determine additional potential sources of capitalization for the business. Launching the equity solicitation process is a critical component to creating a path for the Company to exit chapter 11. SAS has therefore decided to pause the on-going discussions with Apollo to access the second tranche of the DIP term loan, in which certain conditions in the DIP term loan agreement remain to be met for the second tranche to be available. The fee structure of the DIP term loan agreement remains unchanged, and SAS will not incur any additional fees as a result of its decision not to utilize the second tranche of the DIP term loan during the second quarter of fiscal year 2023. SAS currently expects to emerge from its chapter 11 process during the latter part of the second half of 2023 and may, depending on the development of SAS' liquidity position, continue discussions with Apollo regarding access to the second tranche of the DIP term loan at a later stage during the chapter 11 process About Scandinavian Airlines SAS SAB, Scandinavia's leading airline, with main hubs in Copenhagen, Oslo and Stockholm, is flying to destinations in Europe, USA and Asia. Spurred by a Scandinavian heritage and sustainable values, SAS aims to be the global leader in sustainable aviation. The airline will reduce total carbon emissions by 25% by 2025, by using more sustainable aviation fuel and its modern fleet with fuel-efficient aircraft. In addition to flight operations, SAS offers ground handling services, technical maintenance and air cargo services. SAS is a founder member of the Star Alliance, and together with its partner airlines offers a wide network worldwide. On the Web: https://www.sasgroup.net SAS AB and its subsidiaries, including Scandinavian Airlines Systems Denmark-Norway-Sweden and Scandinavian Airlines of North America Inc., sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 22-10925) on July 5, 2022. In the petition filed by Erno Hilden, as authorized representative, SAS AB estimated assets between $10 billion and $50 billion and liabilities between $1 billion and $10 billion. Judge Michael E Wiles oversees the cases. The Debtors tapped Weil, Gotshal & Manges, LLP as global legal counsel; Mannheimer Swartling Advokatbyra AB as special counsel; FTI Consulting, Inc. as financial advisor; and Seabury Securities, LLC and Skandinaviska Enskilda Banken AB as investment bankers. Seabury is also serving as restructuring advisor. Kroll Restructuring Administration, LLC, is the claims agent and administrative advisor. SAS AB: Exclusivity Period Extended to July 31 ---------------------------------------------- Judge Michael E. Wiles of the U.S. Bankruptcy Court for the District of New York extended SAS AB's exclusive filing period and exclusive solicitation period to July 31, 2023 and September 29, 2023, respectively. The judge determined that the legal and factual bases set forth in the Debtors' motion establish just cause for the extension and that the extension is in the best interests of the Debtors, their estates, their creditors, and all parties in interest. About Scandinavian Airlines SAS SAB, Scandinavia's leading airline, with main hubs in Copenhagen, Oslo and Stockholm, is flying to destinations in Europe, USA and Asia. Spurred by a Scandinavian heritage and sustainable values, SAS aims to be the global leader in sustainable aviation. The airline will reduce total carbon emissions by 25% by 2025, by using more sustainable aviation fuel and its modern fleet with fuel-efficient aircraft. In addition to flight operations, SAS offers ground handling services, technical maintenance and air cargo services. SAS is a founder member of the Star Alliance, and together with its partner airlines offers a wide network worldwide. On the Web: https://www.sasgroup.net SAS AB and its subsidiaries, including Scandinavian Airlines Systems Denmark-Norway-Sweden and Scandinavian Airlines of North America Inc., sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 22-10925) on July 5, 2022. In the petition filed by Erno Hilden, as authorized representative, SAS AB estimated assets between $10 billion and $50 billion and liabilities between $1 billion and $10 billion. Judge Michael E Wiles oversees the cases. The Debtors tapped Weil, Gotshal & Manges, LLP as global legal counsel; Mannheimer Swartling Advokatbyra AB as special counsel; FTI Consulting, Inc. as financial advisor; and Seabury Securities, LLC and Skandinaviska Enskilda Banken AB as investment bankers. Seabury is also serving as restructuring advisor. Kroll Restructuring Administration, LLC is the claims agent and administrative advisor. SCF LLC: Seeks to Extend Plan Exclusivity to July 24 ---------------------------------------------------- SCF, LLC asks the U.S. Bankruptcy Court for the Western District of Tennessee to extend its exclusivity periods to file its chapter 11 plan and solicit votes thereon to July 24, 2023 and August 24, 2023, respectively. This is the Debtor's third request for extension. Its current exclusive filing period ends on April 24, 2023. The Debtor explained that it obtained authority to sell its assets to Johnson-Lancaster and Associates, Inc., the same company currently operating at the Debtor's business location pursuant to a management agreement. However, the Debtor stated that the sale is still pending and is currently delayed due to certain issues related to the sale of its business location (not owned by Debtor). The Debtor explained that the closing of the real estate is dependent on the closing of the asset sale and vice versa. The Debtor also added that plan proposal is further delayed by certain adversary proceedings including an interpleader adversary proceeding in which there is a motion for summary judgment pending. SCF, LLC is represented by: Steven N. Douglass, Esq. HARRIS SHELTON HANOVER WALSH, PLLC 40 S. Main Street, Suite 2210 Memphis, TN 38103-2555 Tel: (901) 525-1455 About SCF LLC SCF, LLC provides integrated logistics and barge transportation services on the U.S. The company is based in Adamsville, Tenn. SCF sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Tenn. Case No. 22-10809) on July 27, 2022. In the petition filed by its chief financial officer, Doug Blaylock, the Debtor listed $1 million to $10 million in assets and $10 million to $50 million in liabilities. Judge Jimmy L. Croom oversees the case. Steven N. Douglass, Esq., at Harris Shelton Hanover & Walsh, PLLC is the Debtor's counsel. EmergeLaw, PLLC represents the official committee of unsecured creditors appointed in the Debtor's Chapter 11 case. SCHIERHOLZ AND ASSOCIATES: Unsecureds to Get Share of Gross Revenue ------------------------------------------------------------------- Schierholz and Associates, Inc., filed with the U.S. Bankruptcy Court for the District of Colorado a Subchapter V Plan of Reorganization dated April 18, 2023. Debtor is a Colorado corporation. Debtor owns and operates the Broadmoor Valley Manufactured Housing Community, rents and sells used and new manufactured homes, and operates or leases 20.79 acres of farmland. The majority of Debtor's property and operations are in Marshall, Minnesota. Debtor owns approximately 22 homes, which are personal property under Minnesota law. Paul Schierholz is the sole owner of Debtor and MasterBuilt Homes, LLC. This bankruptcy case was filed amid two state court proceedings involving Debtor, both in the state district court for the County of Lyon, State of Minnesota, the honorable Tricia B. Zimmer presiding: (a) an abatement action by the City of Marshall regarding four homes owned by Debtor, court file number 42-CV-21 844 (the "Abatement Action"); and (b) an action by the State of Minnesota (through the state attorney general's office), court file number 42-CV-21-844 (the "AG Lawsuit"). Class 2 consists of the claim of Kensington Bank or its successors and assigns. The Class 2 Secured Claim shall be allowed in the full amount due and owing under the Note, Deed of Trust and other loan and security document with respect to the Manufactured Housing Community. The Debtor shall continue to make ordinary loan payments as set forth in the applicable loan and security documents until such Claim is paid in-full. Class 3 consists of the claim of Findlay Investment Group or its successors and assigns. The Class 3 Secured Claim shall be allowed in the full amount due and owing under the Note, Deed of Trust and other loan and security document with respect to the Farmland. The Debtor shall continue to make ordinary loan payments as set forth in the applicable loan and security documents until such claim is paid in-full. Class 4 consists of the general unsecured creditors of the Debtor who hold Allowed Claims. Beginning on the first day on the first full quarter following the Effective Date (i.e. January 1, April 1, July 1 or October 1) and on a quarterly basis thereafter for 5 years, the Reorganized Debtor shall calculate its Gross Revenue for the prior 3 month period and distribute 4% percent of the Gross Revenue to the holders of Allowed Unsecured Claims. Upon request by the holder of an Allowed Claim, the Reorganized Debtor shall provide its calculation of Gross Revenue for the period requested. Class 9 includes the Interests of the Debtor, which Interests are unimpaired by the Plan. Upon confirmation of the Plan, the interest holder in the Debtor shall continue to maintain his Interest in the Debtor. The Debtor shall be empowered to take such action as may be necessary to perform its obligations under this Plan. On or about the Effective Date, all assets of the Debtor shall be transferred to the reorganized Debtor free and clear of all liens, claims, and interests of creditors, Interest holders, and other parties in interest. Specifically, the assets shall be transferred subject to the liens held by secured creditors as discussed in the treatment of their claims. On the Effective Date of the Plan, Paul Schierholz shall serve as the agent pursuant to Section 1142(b) of the Bankruptcy Code for the purpose of carrying out the terms of the Plan, and taking all actions deemed necessary or convenient to consummating the terms of the Plans, including, but not limited to, executing documents. The Debtor believes that the Plan, as proposed, is feasible. As detailed in the liquidation analysis, the Plan provides a means for paying all Allowed Claims more than they would receive in a liquidation. It is estimated that the remaining personal property assets would have a value of $100,756.94 in a liquidation, after costs of sale (estimated to be 10% of the value of such assets). An estate of approximately $110,000 would likely result in a trustee commission and attorney fees of at least $10,000.00, leaving approximately $100,000 for distribution to unsecured creditors. Thus, after considering the cost of liquidation and the satisfaction of Chapter 7 administrative expenses, there would be less than $100,000.00 in the bankruptcy estate available to distribute to unsecured creditors. A full-text copy of the Subchapter V Plan dated April 18, 2023 is available at https://bit.ly/41MC0DO from PacerMonitor.com at no charge. Attorneys for Debtor: David J. Warner, Esq. Wadsworth Garber Warner Conrardy, PC 2580 West Main Street, Suite 200 Littleton, CO 80120 Telephone: (303) 296-1999 Facsimile: (303) 296-7600 Email: dwarner@wgwc-law.com About Schierholz and Associates Schierholz and Associates, Inc., owns and operates the Broadmoor Valley Manufactured Housing Community, rents and sells used and new manufactured homes, and operates or leases 20.79 acres of farmland. Schierholz and Associates filed a Chapter 11 bankruptcy petition (Bankr. D. Colo. Case No. 23-10183) on Jan. 18, 2013. Judge Thomas B. Mcnamara oversees the case. The Debtor tapped David J. Warner, Esq., at Wadsworth Garber Warner Conrardy, PC as legal counsel. SEABURY: Fitch Affirms LongTerm IDR at 'BB', Outlook Stable ----------------------------------------------------------- Fitch Ratings has affirmed Church Home of Hartford, CT's (Seabury) Long-Term Issuer Default Rating at 'BB'. The Rating Outlook is Stable. In addition, Fitch has affirmed the 'BB' revenue rating on approximately $80 million of revenue bonds issued by the state of Connecticut Health and Educational Facilities Authority and the Public Finance Authority Healthcare Facility of Wisconsin on behalf of Seabury. The Rating Outlook is Stable. Entity/Debt Rating Prior ----------- ------ ----- Church Home of Hartford Incorporated d/b/a Seabury (CT) LT IDR BB Affirmed BB Church Home of Hartford Incorporated d/b/a Seabury (CT) /General Revenues/1 LT LT BB Affirmed BB SECURITY The bonds are secured by a pledge of gross revenues of the obligated group (OG), a mortgage and a debt service reserve fund. ANALYTICAL CONCLUSION The 'BB' rating reflects the expected resilience of Seabury's financial profile through Fitch's forward-looking scenario analysis. This is within context of the strength of Seabury's business profile, which is characterized by mid-range revenue defensibility and mid-range operating risk with a history of elevated leverage and stable liquidity. KEY RATING DRIVERS Revenue Defensibility: 'bbb' Single Site LPC, Stable Demand and Pricing Characteristics At FYE 2022 (September year-end), IL occupancy was 82%. The other areas of care were similarly weak at 81% in the ALUs, 66% in MC and 83% in SNF. Before 2021, utilization trended near 90%. Fitch does not expect IL occupancy to rebound to 90%. However, the midrange assessment reflects Fitch's expectation that occupancy will exceed 86% over the Outlook period. Seabury is a single site provider in Bloomfield CT, a moderately competitive service area. Seabury and its local competitors continue to operate successfully in relatively close proximity to each other. Compared to neighboring LPCs, Seabury is larger and offers a Type-A contract. Seabury has a history of modest annual fee increases indicating mid-range pricing flexibility. While typical home values in Bloomfield are below the average entrance fee at Seabury, management has reported strong demand for its most expensive units and has a waitlist for select premium units. Operating Risk: 'bbb' Adequate Core Operations Fitch's assessment of Seabury's operating risk is based on its improving profitability ratios, contract type and elevated capital investment. Seabury has strategically invested in capital improvements to maintain its competitive position as indicated in its demand profile and in its relatively low average age of plant. Seabury's mid-range operating risk assessment reflects the community's stable metrics balanced against the Type-A contract type. On average over the past three years, Seabury has had an operating ratio, NOM and NOMA of 98.1%, 13.3% and 17.9% respectively. Seabury's capital expenditures have averaged about 70% of depreciation over the past five years, with the past two years closer to 20%. Average age of plant is adequate at 11 years, supporting the mid-range assessment. Capital related metrics support the midrange assessment as well with average revenue-only MADS coverage and MADS as a percentage of revenue at .9x and 15.4% for the past three years. Average debt to net available was elevated at 12.4 for the past three years. Fitch expects this metric to incrementally improve over the next several years with regular redemptions of existing debt. Seabury has no reported plans to increase its debt. Financial Profile: 'bb' Stable Liquidity and Elevated Leverage Given Seabury's mid-range revenue defensibility, midrange operating risk assessments, and Fitch's forward-looking scenario analysis, Fitch expects key leverage metrics to remain consistent with the current financial profile, throughout the current economic and business cycle. As of YE 2022, Seabury had unrestricted cash and investments of approximately $24 million. This represents about 31% of total debt. DCOH was adequate for the rating level at 270 days at the end of 2022. Management reported 1.3x DSCR for FY 2022, which exceeds the 1.2x covenant required minimum. Fitch expects Seabury to meet its DSCR covenant over the Outlook period. Fitch's baseline scenario, which is a reasonable forward look of financial performance over the next five years given current economic expectations, shows Seabury maintaining operating and financial metrics that are largely consistent with the current rating and with historical levels of performance operating ratios in the high 90% range and NOMs around 10%. Capital spending is expected to remain consistent with the past two years with no major projects factored in. Fitch expects Seabury's liquidity metrics to remain consistent with 'BB' rating. Asymmetric Additional Risk Considerations No asymmetric risks informed the rating decision. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Continued growth in unrestricted liquidity such that cash to adjusted debt is greater than 50%. Factors that could, individually or collectively, lead to negative rating action/downgrade: - An erosion in unrestricted liquidity such that cash to adjusted fall to below 25% and is not expected to improve; - If IL occupancy stabilizes at or below 86%; - Operating ratios consistently at or above 100%; - Failure to meet the DSCR covenant minimum of 1.2x. CREDIT PROFILE Seabury is a Type 'A' life plan community (LPC) located in Bloomfield, CT, just northwest of Hartford that includes 214 ILU apartments, 32 ILU cottages, 58 ALUs, 72 SNF beds and six additional IL cottages available for short term rent. Seabury offers 50% and 80% refundable plans and a non-refundable plan. Fitch bases its analysis on the results of the OG. Total OG operating revenues were about $36 million in fiscal 2022. Seabury also has two non-OG affiliated organizations, the Seabury Charitable Foundation at Seabury At Home, which is an LPC without walls. Sources of Information In addition to the sources of information identified in Fitch's applicable criteria specified below, this action was informed by information from Lumesis. 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. SORRENTO THERAPEUTICS: Scilex Holdings Wants to Sell Shares ----------------------------------------------------------- Jodi Xu Klein of The Wall Street Journal reports that bankrupt drugmaker Sorrento Therapeutics Inc.'s subsidiary Scilex Holding Co. is exploring a sale of new stock to take advantage of a share-price rally as Sorrento charts a path out of chapter 11, according to people familiar with the matter. Shares in publicly traded Scilex, Sorrento's largest asset, have more than doubled in value since its parent company filed for chapter 11 in February 2023, closing at $14.80 on April 12, 2023, to give Scilex a market capitalization of more than $2 billion. About Sorrento Therapeutics Sorrento Therapeutics, Inc. -- http://www.sorrentotherapeutics.com/ -- is a clinical and commercial stage biopharmaceutical company developing new therapies to treat cancer, pain (non-opioid treatments), autoimmune disease and COVID-19. Sorrento's multimodal, multipronged approach to fighting cancer is made possible by its extensive immuno-oncology platforms, including key assets such as next-generation tyrosine kinase inhibitors ("TKIs"), fully human antibodies ("G-MAB(TM) library"), immuno-cellular therapies ("DAR-T(TM)"), antibody-drug conjugates ("ADCs"), and oncolytic virus ("Seprehvec(TM)"). Sorrento is also developing potential antiviral therapies and vaccines against coronaviruses, including STI-1558, COVISHIELD(TM) and COVIDROPS(TM), COVI-MSCTM; and diagnostic test solutions, including COVIMARK(TM). Sorrento Therapeutics, Inc., and Scintilla Pharmaceuticals, Inc., sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 23-90085) on Feb. 13, 2023. Sorrento disclosed assets in excess of $1 billion and liabilities of about $235 million as of Feb. 10, 2023. Judge David R. Jones oversees the cases. Jackson Walker LLP and Latham & Watkins LLP are serving as legal counsel to Sorrento. M3 Partners is serving as restructuring advisor. Stretto Inc. is the claims agent. On Feb. 28, 2023, the U.S. Trustee for Region 7 appointed an official committee to represent unsecured creditors in the Debtors' Chapter 11 cases. The committee is represented by the law firms of Norton Rose Fulbright US, LLP and Milbank, LLP. Berkeley Research Group, LLC is the committee's financial advisor. SOUTHERN CLEANING: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Southern Clearing & Grinding, Inc. 7901 4th St N, Ste 300 Saint Petersburg, FL 33702 Business Description: The Debtor is a turnkey vegetation removal contractor. Chapter 11 Petition Date: April 21, 2023 Court: United States Bankruptcy Court Middle District of Florida Case No.: 23-01586 Debtor's Counsel: Jeffrey S. Ainsworth, Esq. BRANSONLAW, PLLC 1501 E. Concord Street Orlando, FL 32803 Tel: 407 894 6834 Fax: 407 894 8559 Email: jeff@bransonlaw.com Total Assets: $4,205,593 Total Liabilities: $4,212,083 The petition was signed by Shane Dinkins as president. A full-text copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/XDV3RNY/Southern_Clearing__Grinding_Inc__flmbke-23-01586__0001.0.pdf?mcid=tGE4TAMA STRUCTURLAM MASS: Case Summary & 30 Largest Unsecured Creditors --------------------------------------------------------------- Lead Debtor: Structurlam Mass Timber U.S., Inc. 2176 Government St Penticton, British Columbia V2A 8B5 Business Description: Structurlam is a manufacturer of mass timber solutions including cross laminated timber, Glulam beams, industrial matting and more. Chapter 11 Petition Date: April 21, 2023 Court: United States Bankruptcy Court District of Delaware Four affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- Structurlam Mass Timber U.S., Inc. 23-10497 Natural Outcomes, LLC 23-10498 Structurlam Mass Timber Corporation 23-10499 SLP Holdings Ltd. 23-10500 Debtors' Local Bankruptcy Counsel: M. Blake Cleary, Esq. POTTER ANDERSON & CORROON LLP 1313 North Market Street, 6th Floor Wilmington, Delaware 19801 Tel: (302) 984-6000 Email: bcleary@potteranderson.com Debtors' General Bankruptcy Counsel: PAUL HASTINGS LLP Debtors' Canadian Bankruptcy Counsel: GOWLING WLG Debtors' Financial Advisor: ALVAREZ & MARSAL CANADA INC. Debtors' Investment Banker: STIFEL, NICOLAUS & COMPANY, INCORPORATED - AND - MILLER BUCKFIRE & CO., LLC Debtors' Notice & Claims Agent: KURTZMAN CARSON CONSULTANTS LLC Estimated Assets: $100 million to $500 million Estimated Liabilities: $100 million to $500 million The petitions were signed by Shawn Turkington as authorized signatory. Full-text copies of the petitions are available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/7HW4LSY/Structurlam_Mass_Timber_US_Inc__debke-23-10497__0001.0.pdf?mcid=tGE4TAMA https://www.pacermonitor.com/view/7DRSDGI/Natural_Outcomes_LLC__debke-23-10498__0001.0.pdf?mcid=tGE4TAMA https://www.pacermonitor.com/view/DWOMUZY/Structurlam_Mass_Timber_Corporation__debke-23-10499__0001.0.pdf?mcid=tGE4TAMA https://www.pacermonitor.com/view/D5UFL5A/SLP_Holdings_Ltd__debke-23-10500__0001.0.pdf?mcid=tGE4TAMA Consolidated List of Debtors' 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount 1. Walmart, Inc. Contract US$34,000,000 Legal Department - Counterparty Corporate Division 702 S.W. 8th St. Bentonville, AR 72716 Tel: 479-273-4000 Email: rachel.brand@walmart.com 2. Stiles Machinery Inc. Contract US$1,298,769 Patrick Mundwiler, Counterparty Kent Hartman 3944 Solutions Center Chicago, IL 60677-3009 Tel: 616-698-7500 Email: dlourens@stilesmachinery.com 3. Stuart Olsen Construction Contract C$1,200,000 Ashley Rancourt Counterparty #300 - 13777 Commerce Parkway Richmond, BC V6V 2X3 Canada Tel: 604-271-4600 4. Bird Construction Contract C$670,000 Marc Da Silva Counterparty #300 - 13777 Commerce Parkway Richmond, BC V6V 2X3 Tel: 204-775-7141 X3351 5. Marcon Metalfab Inc. Trade Payable C$597,667 7156 Brown Street Delta, BC V4G 1G8 Canada Tel: 604-948-0977 Fax: 604-948-0978 Email: accounting@marconmetalfab.com 6. Simpson Strong Tie Canada Trade Payable C$407,106 Limited Arthur Mnatsakanian 844-19055 Airport Way Pitt Meadows, BC V3Y 0G4 Canada Email: remittanceadvices@strongtie.com 7. Day & Ross Trade Payable C$383,558 11470 131st Street Surrey, BC V3R 4S7 Canada Tel: 506-375-4401 Fax: 506-375-4945 Email: remittancedetails@dayandcrossinc.ca 8. Heavy Timber Group Trade Payable C$322,004 Kri Spickler 4120 Douglas Blvd #306-502 Granite Bay, CA 95746 Tel: (916) 797-5588 9. Fox's Transport Ltd. Trade Payable C$292,785 8328 1st Street Edmonton, AB T6P 1X2 Canada Tel: 780-410-1960 Email: emahawan@foxtransport.com 10. Henkel Corporation Trade Payable US$183,100 10 Finderne Ave Bridgewater, NJ 08807 Tel: 908-685-7000 Email: ha.remit@us.henkel.com 11. Rotho Blaas USA Inc. Trade Payable US$174,539 William Broderick 30 Wall St, 8th Floor New York, NY 10005 Tel: 917-656-9077 Email: usa@rothoblaas.com 12. Aspect Structural Professional C$207,297 Engineers Canada Ltd. Services: 101-190 West 3rd Avenue Engineering Vancouver, BC V5Y 1E9 Canada Tel: 604-389-9296 Email: accounts@aspectengineers.com 13. WeyerHaeuser NR Company Trade Payable US$123,697 200 Occidental Ave S Seattle, WA 98104 Tel: 206-539-4043 Fax: 253-928-2327 Email: accts.recv@wy.com 14. Henkel Canada Corporation Trade Payable C$163,220 c/o 912360 PO Box 4090 STN A Toronto, ON M5W 0E9 Canada Email: ha.remit@us.henkel.com 15. Hexion Canada Inc. Trade Payable C$142,307 c/o LBX V7444 c/u BNS Wholesale Lockbox PO Box 7444 Station Terminal Vancouver, BC V6B 4E2 Canada Tel: 469-749-8402 Email: northamericaar@hexion.com 16. Contech Construction Ltd Trade Payable C$125,208 Kitty Taylor 150 - 12860 Clarke Place Richmond, BC V6V2H1 Canada Tel: 604-519-1711 Email: accounting@contechconstructionltd.com 17. Western Lumber Company, LLC Trade Payable C$112,148 2240 Tower East Suite 200 Medford, OR 97504 Tel: 541-779-4121 Fax: 541-779-0155 Email: accounting@westernlumber.com 18. Owens Corning Canada LP Trade Payable C$95,059 c/o 10275 PO Box 4918 STN A Toronto, ON M5W 0C9 Canada Email: cashappteam@owenscorning.com 19. New West Installations Ltd. Trade Payable C$82,973 630 Beaver Lake Road Kelowna, BC V4V 1S7 Canada Tel: 250-766-2271 Fax: 250-766-2171 Email: deniseh@newwestind.com 20. BDO Canada LLP Professional C$77,115 (Kelowna Branch) Services: 400-1631 Dickson Avenue Auditor Kelowna, BC V1Y 0B5 Canada Tel: 250-763-6700 Email: eftpayments@bdo.ca 21. Monashee Manufacturing Trade Payable C$76,512 Corporation Ltd Grant Vandermye 1247 Ellis Street Kelowna, BC V1Y 1Z6 Canada Tel: 250-762-2646 Email: l.zhang@monasheemfg.com; grant.van@monasheemfg.com 22. Timber Engineering Inc. Professional C$73,143 Marta MAJ Service: 3637 West 6th Aven Engineering Vancouver, BC V6R 1T6 Canada Tel: 604-839-0214 Fax: 604-679-7832 Email: marta.maj@timberengineering.ca 23. Ticomtec USA, Inc. Professional C$71,908 Mikhail Gershfeld Services: 500 S. Jefferson, St. Engineering Placentia, CA 92870 Tel: 714-936-4563 Email: mikhail.gershfeld@gmail.com 24. Woodpecker European Timber Trade Payable C$68,296 Framing & Woodworks Ltd #5 - 5 Cougar Mountain Crescent Exshaw, AB T0L 2C1 Canada Tel: 403-673-3333 Email: office@europeantimberframing.com 25. Broadhead Operating Professional C$63,376 DBA HMH Agency Services 411 Washington Ave N Ste 500 Minneapolis, MN 55401 Tel: 503-295-1922 Email: accounting@broadheadco.com 26. Swayback Holdings Ltd. Lease C$60,827 402 Warren Avenue East Penticton, BC V2A 3M2 Canada Tel: 250-493-7972 Email: bmhehrer@greyback.com 27. CAL-Tex Lumber Co Trade Payable US$42,494 2912 Rayburn Dr Nacogdoches, TX 75963-1010 Tel: 936-564-6426 Fax: 936-5460-3888 Email: chaser@caltexlbr.com 28. MTC Solutions Trade Payable C$57,340 Unit 106 - 12941 115th Street Surrey, BC V3R 0E2 Canada Tel: 866-899-4090 Email: accounting@mtcsolutions.com 29. Williams Scotsman, Inc. Lease US$40,885 PO Box 91975 Chicago, IL 60693-1975 Tel: 410-931-6000 Email: cashws@willscot.com 30. Fastenal Company Trade Payable US$38,576 650 E Robins Street Conway, AR 72032 Tel: 501-327-7273 Fax: 501-327-6994 Email: uswirepayments@fastenal.com SUN PACIFIC: Swings to $278,610 Net Loss in 2022 ------------------------------------------------ Sun Pacific Holding Corp has filed with the Securities and Exchange Commission its Annual Report on Form 10-K disclosing a net loss of $278,610 on $265,573 of revenues for the year ended Dec. 31, 2022, compared to net income of $2.97 million on $377,593 of revenues for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $177,390 in total assets, $3.27 million in total liabilities, and a total stockholders' deficit of $3.09 million. Dallas, Texas-based Turner, Stone & Company, L.L.P., the Company's auditor since 2017, issued a "going concern" qualification in its report dated April 17, 2023, citing that the Company has suffered recurring losses from operations since inception and has a significant working capital deficiency, both of which raise substantial doubt about its ability to continue as a going concern. A full-text copy of the Form 10-K is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/0001343465/000149315223012644/form10-k.htm About Sun Pacific Headquartered in Manalapan NJ, Sun Pacific Holding Corp. -- http://www.sunpacificholding.com-- is a diversified publicly traded holding company encompassing the following subsidiaries: Sun Pacific Power Corp, Street Smart Outdoor Corp, and National Mechanical Corp. Its focus is protecting the environment by adapting new green technologies and developing synergy across its subsidiaries. TALEN ENERGY: Fitch Gives 'BB-' LongTerm IDR, Outlook Stable ------------------------------------------------------------ Fitch Ratings has assigned a Long-Term (LT) Issuer Default Rating (IDR) to Talen Energy Supply, LLC (Talen) of 'BB-'. The Rating Outlook is Stable. In addition, Fitch has assigned instrument ratings of 'BB+'/'RR1' to the proposed senior secured debt, which is comprised of Term Loan B, Term Loan C and a revolving credit facility, collateralized by a perfected security interest in substantially all the pre-petition generation facilities, excluding LMBE-MC and the clean investments. Fitch has also assigned 'BB-'/'RR4' ratings to the unsecured debt which, is comprised of legacy tax-exempt bonds. The ratings and Outlook reflect moderate leverage, limited geographic diversification, exposure to market prices in a volatile commodity price environment, and a dominant share of nuclear in its generation mix, which significantly benefits from production tax credits (PTC) provided by the Inflation Reduction Act of 2022 (IRA). KEY RATING DRIVERS Moderate Leverage In-Line With Business Risk: Fitch expects Talen to generate adjusted EBITDA upward of $1.1 billion for the full year 2023 inclusive of the benefit of commodity hedges. Thereafter, adjusted EBITDA (excluding LMBE) declines considerably in the $520 million-$550 million range over 2024-2026. The step-down in EBITDA reflects Fitch's expectations of lower level of commodity hedges, a significant decline in power prices from last year's elevated energy price environment and continued subdued capacity prices in PJM in line with 2023/2024 RPM auction results, and declining natural gas price assumptions. The stability in Fitch's EBITDA forecast starting 2024 is anchored by cash flows from nuclear assets and assumes continued strong nuclear performance consistent with recent plant operations. Proforma for the proposed exit financings, Fitch expects Talen's Gross Debt to EBITDA to average approximately 4.0x over 2024-2026. Fitch has excluded the debt at LMBE-MC from its calculations, which continues to be non-recourse, but included the proposed Term Loan C. The cash proceeds from this issuance of the TLC will be held in an escrowed account, excluding which Fitch expects leverage between 3.4x-3.6x during the same period. Fitch believes a move higher in commodity prices from current levels or higher than anticipated power prices in future PJM capacity market auctions would result in increased EBITDA relative to expectations at Talen and potential improvement in credit metrics. Limited Need for Additional Financing: Exit financing will largely be comprised of senior secured facilities, including a combination of term loans and revolving credit facilities, which will be pari passu. The unsecured debt consists of $131 million of legacy tax-exempt PEDFA bonds and Fitch assumes that their current LC supported credit enhancement features will fall away upon Talen's emergence from bankruptcy. Notably, the exit financing documentation provides material capacity for additional debt through various facilities and lien/general debt baskets. At this time, Fitch expects Talen to be self-sufficient in meeting its capital investment needs, including conversion of coal assets into natural gas and ARO liabilities. Nuclear PTC Mechanism Provides Revenue Floor: The IRA provides a production tax credit (PTC) subsidy for nuclear power plants, which translates into an effective power price floor of $43.75/MWh. The PTC mechanism is expected to be implemented in 2024 and will be in effect for the next nine years, with the PTC escalating with inflation over this period of time. Fitch expects power prices in PJM are likely to be above the implied power price floor in most of the forecast years of 2023-2027. The downside protection for cash flows provided under the IRA is a key credit strength. Fitch expects nuclear PTCs to create an annual EBITDA floor of approximately $380 million for Talen, should the operational performance of the Susquehanna nuclear units remain strong in a significantly lower than expected commodity price environment. Sensitivity to Commodity Prices: Similar to other merchant power generation companies, Talen's generation fleet is exposed to changes in energy and capacity prices, which creates volatility in EBITDA and FCF. Over the last 18 months, energy prices have been volatile, in turn reflecting volatility in natural gas prices. However, the impact of this risk to base case cashflows is likely to be partially mitigated as the nuclear PTCs kick-in. PJM, which operates in the Mid-Atlantic region, is by far the largest power market for Talen, representing 75% of generating capacity. Fitch generally has a favorable view of the PJM market since the three-year forward looking capacity auctions provide additional cash flows to a generator simply for making its capacity available. That said, the last two auctions have produced disappointing outcomes as a result of lower peak demand, new generation and auction participants' bidding behavior, among other factors. The structure and efficacy of the capacity auction in PJM and other deregulated power markets is under review, which if revised unfavorably or eliminated totally would have an adverse effect on the ratings. Limited Diversification and Scale: Talen has limited geographical and fuel diversity with approximately 80% of its realized energy margin coming from PJM. Its Susquehanna nuclear plant alone contributes approximately 60% of total realized energy margin. While the nuclear plant has been running at industry leading capacity factors, any unforeseen adverse event could be material to Talen. Clean Investments Provides Growth Potential: Talen is also developing clean energy assets such as renewable generation, energy storage and sale of power to data centers under long-term power sale agreements. The clean energy investments, are non-recourse entities to Talen and outside the credit package for the exit financing. Fitch expects these businesses will largely be funded with project level financing. After balance sheet management, a portion of Talen's excess cash flows may be used to fund some of this development. Given that most of these businesses are still under development, Fitch has not included any material net cash receipts from these growth investments in its current analysis. Over the long term, additional power sales agreements with data centers could provide a contracted stream of revenue for the Susquehanna nuclear plant, lending stability to its cash flow generation and improving Talen's business risk profile. Within TES, the company plans to exit from coal generation by 2025, by either closure of plants and/or conversion to natural gas. Talen has set a target to reduce carbon emissions by 75% by 2030 from a 2010 baseline. DERIVATION SUMMARY Talen is unfavorably positioned compared with Vistra Energy Corp. (Vistra, BB/Stable) and Calpine (B+/Stable) with respect to size, asset composition and geographic exposure and is also considerably larger in scale than Energy Harbor (BB+/Watch Neg). Vistra is the largest independent power producer in the country with approximately 38GW of generation capacity compared to Calpine's 26GW, Talen's 12.5GW and Energy Harbor's 4GW. Talen lacks significant geographical diversity, similar to Energy Harbor, though Fitch believes PJM is a constructive market for power generators given the capacity auction construct. Talen's nuclear portfolio has two units at a single site with net ownership capacity of 2.2GW, which is smaller than Energy Harbor's four units totaling 4GW across three locations. Calpine and Vistra have much larger generation portfolios. Talen has some diversity by fuel mix and its portfolio has a mix of baseload, intermediate load and peakers, which positions it better with respect to Energy Harbor, whereas Calpine and Vistra have large diversified fleets. Overall, Fitch attaches higher operational risk to nuclear generation assets while recognizing that operational performance of Talen's and Energy Harbor's nuclear assets has been strong historically. Calpine's younger and predominant natural gas fired fleet bears less operational and environmental risk as compared to nuclear and coal generation assets owned by Vistra and Talen. Vistra and Energy Harbor benefit from ownership of large and well entrenched retail electricity businesses in contrast to Calpine, whose retail business is much smaller. Talen has a modest retail business focused on C&I customers. With Talen's goal of entering into PPA with data centers, over time, contracted revenues could drive more predictability to EBITDA. Talen and Energy Harbor both benefit from nuclear PTCs provided under the IRA. However, this benefit is more material for Energy Harbor given its 100% nuclear concentration. Talen's forecast leverage is low and positioned well for its rating. Fitch forecasts Talen's debt to EBITDA leverage ratio to be around 4.0x over 2024-2026, which is significantly weaker than Energy Harbor's 1.0x but similar to Vistra's at 3.5x and significantly stronger than Calpine's 5.0x. KEY ASSUMPTIONS Key Assumptions under the Fitch Rating Case: - Talen emerges from bankruptcy effective May 2023; - Energy prices in PJM and ERCOT ranging between $45/MWh to mid $30/MWh; - Nuclear PTC contemplated in the IRA is executed with a $43.75/MWh price as expected; - Historical PJM capacity auction results as announced; relatively modest increase for future auctions; - Total capex averaging $250 million annually; - Common Dividends of about $75 million annually; - FCF is recycled toward supporting the balance sheet and thereafter the development of the digital infrastructure platform; - Contracted PPA revenues for 148 MW for the Susquehanna nuclear plant until October 2026; No other material net cash inflows expected from the growth businesses over the forecast period; - The RCF and term loans are pari passu; the current credit enhancement for $131 million PEDFA Series B&C bonds fall away; - Interest rate assumptions as follows: SOFR + 450bps for senior secured term loans, and around 9% all-in for the unsecured debt. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - EBITDA leverage better than 3.5x on a sustainable basis; - Balanced allocation of FCF that maintains balance sheet flexibility and leverage within stated goal; - Demonstrated ability to hedge effectively and manage liquidity through commodity cycles. Factors that could, individually or collectively, lead to negative rating action/downgrade: - EBITDA leverage exceeding 4.5x on a sustainable basis; - Weaker than expected power prices or capacity auctions in core regions; - Aggressive growth or capital allocation strategy that reduces stability of cash flow; - Constrained liquidity position or hedges that are deemed to be out of the money; - Elimination-of or degradation-in the capacity market construct in the PJM adversely affecting revenue visibility; - Unfavorable changes in other regulatory constructs or rules in Talen's markets; - The rating for term loans could be lowered by one or more notches if the revolving credit facility is given a super priority lien. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: Talen has $550 million-$700 million of undrawn revolver liquidity, in addition to self-generated cash, which Fitch considers as adequate. Talen plans to limit the use of exchange-traded hedges and increase the use of first-lien hedges, which should minimize collateral posting requirements. The liquidity is sufficient to cover collateral posting requirements, working capital requirements and increases in interest rate expenses under Fitch's rating case assumptions. The TLC drawn to cash will be available to backstop letters of credit. ISSUER PROFILE Talen, a subsidiary of Talen Energy Corporation, is an independent power producer that owns approximately 13,000MW of generation capacity. ESG Commentary 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. Fitch's ESG Relevance scores vary from 1 to 5, with a higher score reflecting greater materiality to credit. Given Talen's planned exit from coal assets by 2025, Fitch does not see any credit impact to its ownership of coal assets. Hence, Talen's ESG Relevance Score is '3'. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Talen Energy Supply, LLC LT IDR BB- New Rating WD senior secured LT BB+ New Rating RR1 senior unsecured LT BB- New Rating RR4 USA COMPRESSION: Moody's Affirms 'B1' CFR, Outlook Remains Stable ----------------------------------------------------------------- Moody's Investors Service affirmed USA Compression Partners, LP's (USAC) B1 Corporate Family Rating and the B3 rating on its senior unsecured notes. The Speculative Grade Liquidity (SGL) Rating remains unchanged at SGL-3. USAC's outlook remains stable. "The affirmation reflects USAC's significant scale in the contract natural gas compression sector and its strong presence within the key hydrocarbon producing basins in the US," commented John Thieroff, Moody's Senior Credit Officer. "High utilization and an expanding fleet should allow USAC to reduce debt leverage through 2024." Affirmations: Issuer: USA Compression Partners, LP Corporate Family Rating, Affirmed B1 Probability of Default Rating, Affirmed B1-PD Senior Unsecured Regular Bond/Debenture, Affirmed B3 (LGD5) Outlook Actions: Issuer: USA Compression Partners, LP Outlook, Remains Stable RATINGS RATIONALE USAC's B1 CFR reflects the extensive scale of its high horsepower (HP) compression fleet and the diverse geographic reach over which it is deployed. More than 75% of USAC's 3.1 million active HP fleet is advantageously comprised of high HP compression (exceeding 1,000 HP per unit). A fee-based contractual revenue stream produces stable gross margins that have consistently exceeded 60%. The increased reliance on compression in shale plays and the burdensome cost to the customer associated with returning equipment adds to the stickiness of revenue. Debt leverage, thin distribution coverage, and the industry's exposure to natural gas production volumes offset the company's otherwise strong operating profile. Strong demand characteristics further support the company's credit profile, as US natural gas production continues to grow, driven by strong demand from LNG export markets, power generation, and petrochemical production. Natural gas compression continues to play a vital role in support of the systemic regional movement and supply of natural gas. USAC's senior notes are rated B3, two notches below the B1 CFR, reflecting the unsecured debt's junior position relative to the size of potential priority claims under USAC's senior secured ABL revolving credit facility. The notes are unsecured and guaranteed by substantially all of its domestic subsidiaries. USAC's SGL-3 Speculative Grade Liquidity Rating reflects adequate liquidity through mid-2024 and is principally supported by its $1.6 billion secured ABL revolving credit facility. At December 31, 2022, $646 million was outstanding under the facility and while almost $1 billion of the borrowing base was available, the facility's financial covenants limited USAC's available borrowing capacity to $333 million. The credit facility requires maintenance of minimum 2.5x interest coverage, and a maximum 5.5x debt/EBITDA through the third quarter of 2023 and 5.25x thereafter, levels at which Moody's expects USAC to remain in compliance through mid-2024. USAC's growth plans for 2023 will result in material outspending of post-distribution cash flow by more than $150 million, which Moody's expects will be funded by borrowing from the revolver. USAC's senior unsecured notes mature in 2026 and 2027. The revolver expires in December 2026, except that if any portion of the 2026 Senior Notes are outstanding at year-end 2025, the revolver will expire on December 31, 2025. Alternate sources of liquidity beyond spending and/or distribution cuts are limited as assets are pledged as collateral to the revolver. Moody's expects USAC to continue its high payout ratio, although coverage is likely to improve to 1.2x or better in 2023 absent a distribution increase. USAC's ability to pay distributions is subject to compliance with its financial covenants and if after giving effect to the distribution, the company has availability under its revolver of at least $250 million. After September 30, 2023, the availability requirement reduces to $100 million. The stable outlook reflects Moody's expectation that gross margins will stay relatively flat, remaining well above 60%, and leverage will trend back to below 5x. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded if debt leverage is sustained below 4.5x and distribution coverage is consistently maintained above 1.2x. Moody's would consider downgrading USAC's ratings if debt leverage approaches 5.5x or distribution coverage is maintained below 1.0x. USA Compression Partners, LP, headquartered in Austin, Texas, is a publicly traded partnership providing compression services to the domestic natural gas industry. The company provides its services to exploration and production companies as well as to midstream energy and utility companies. Energy Transfer LP holds the non-economic general partnership interest in USAC as well as 47% of its common units. The principal methodology used in these ratings was Oilfield Services published in January 2023. VERITAS FARMS: Incurs $5.1 Million Net Loss in 2022 --------------------------------------------------- Veritas Farms, Inc. has filed with the Securities and Exchange Commission its Annual Report on Form 10-K disclosing a net loss of $5.14 million on $1.06 million of revenues for the year ended Dec. 31, 2022, compared to a net loss of $7.07 million on $2.90 million of revenues for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $6.79 million in total assets, $7.40 million in total liabilities, and a total shareholders' deficit of $606,277. Hackensack, NJ-based Prager Metis CPAs LLC, the Company's auditor since 2018, issued a "going concern" qualification in its report dated April 17, 2023, citing that the Company has sustained substantial losses from operations since its inception. As of and for the year ended Dec. 31, 2022, the Company had an accumulated deficit of $39,474,622, and a net loss of $5,543,908. These factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern within a year from the date the financial statements are issued. Continuation as a going concern is dependent on the ability to raise additional capital and financing, though there is no assurance of success. A full-text copy of the Form 10-K is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/0001669400/000121390023030190/f10k2022_veritasfarms.htm About Veritas Fort Lauderdale, Florida-based Veritas Farms, Inc. -- www.TheVeritasFarms.com -- is a vertically-integrated agribusiness focused on growing, producing, marketing, and distributing superior quality, whole plant, full spectrum hemp oils and extracts containing naturally occurring phytocannabinoids. Veritas Farms owns and operates a 140 acre farm in Pueblo, Colorado, capable of producing over 200,000 proprietary full spectrum hemp plants which can potentially yield a minimum annual harvest of 250,000 to 300,000 pounds of outdoor-grown industrial hemp. VESTA HOLDINGS: Updates Liquidating Plan Disclosures ---------------------------------------------------- Vesta Holdings, LLC, and its Debtor Affiliates submitted a Modified Third Amended Combined Joint Chapter 11 Plan of Liquidation and Disclosure Statement dated April 18, 2023. Pursuant to the Plan, the Debtors seek resolution of outstanding Claims against, and Interests in, the Debtors, and the liquidation of the Debtors' remaining assets. This Plan is a joint plan for each of the Debtors and presents together Classes of Claims against, and Interests in, the Debtors. The Plan does not provide for the substantive consolidation of the Debtors. Rather, the Plan constitutes a separate Plan proposed by each Debtor, and each Class constitutes a separate Class of Claims against, and Interests in, each of the Debtors, as applicable. U.S. Securities and Exchange Commission Notwithstanding any language to the contrary contained in this Combined Plan and Disclosure Statement and/or the Confirmation Order, no provision of the Plan or the Confirmation Order shall (i) preclude the SEC from enforcing its police or regulatory powers; or (ii) enjoin, limit, impair, or delay the SEC from commencing or continuing any claims, causes of action, proceedings or investigations against any non-debtor person or entity in any forum. Like in the prior iteration of the Plan, each Holder of an Allowed Unsecured Claim shall receive a beneficial interest in the Liquidating Trust entitling such Holder to such Holder's Pro Rata share (calculated based on the total aggregate amount of Allowed Claims in Class 2, after reducing such amount dollar for dollar for the amount of any Prepetition Lender Distribution Proceeds, and Class 5) of the Unsecured Claims Distribution Proceeds (if any). The Liquidating Trust Assets shall be used to fund the distributions to Holders of Allowed Claims against the Debtors in accordance with the treatment of such Claims provided pursuant to the Plan. On or prior to the Effective Date, the Debtors, on their own behalf and on behalf of the Beneficiaries, will execute the Liquidating Trust Agreement and will take all other steps necessary to establish the Liquidating Trust pursuant to the Liquidating Trust Agreement. On the Effective Date, and in accordance with and pursuant to the terms of the Plan, the Debtors will transfer to the Liquidating Trust all of their rights, title, and interests in all of the Liquidating Trust Assets. On the Effective Date, the applicable Debtors or the Liquidating Trustee shall enter into any transaction and shall take any actions as may be necessary or appropriate to effect the transactions, including, as applicable, one or more intercompany mergers, consolidations, amalgamations, arrangements, continuances, restructurings, conversions, dispositions, dissolutions, transfers, liquidations, spinoffs, intercompany sales, purchases, or other corporate transactions (collectively, the "Restructuring Transactions"). A full-text copy of the Modified Third Amended Combined Plan and Disclosure Statement dated April 18, 2023 is available at https://bit.ly/3KXMwBp from Omni Agent Solutions, Inc., claims agent. Counsel for Debtors: Jeremy W. Ryan, Esq. Potter Anderson & Corroon, LLP 1313 N. Market Street, 6th Floor Wilmington, DE 19801 Telephone: (302) 984-6108 Facsimile: (302) 658-1192 Email: jryan@potteranderson.com Mark R. Somerstein, Esq. Lucas W. Brown, Esq. Christine Joh, Esq. Ropes & Gray LLP 1211 Avenue of the Americas New York, NY 10036 Telephone: (617) 951-7474 Email: Mark.Somerstein@ropesgray.com lucas.brown@ropesgray.com christine.joh@ropesgray.com - and - ROPES & GRAY LLP Ryan Preston Dahl, Esq. Benjamin M. Rhode, Esq. 191 North Wacker Drive, 32nd Floor Chicago, Illinois 60606 Telephone: (312) 845-1200 Facsimile: (312) 845-5500 E-mail: ryan.dahl@ropesgray.com benjamin.rhode@ropesgray.com About Vesta Holdings Historically, Vesta Holdings, LLC and each of its affiliates provided wealth advisory, risk management services, and insurance brokerage services to individual and corporate clients across the United States. In recent years, they have focused on growing their insurance brokerage services business, which is primarily operated under Summit Risk Advisors, LLC. Summit primarily concentrates on property and casualty insurance offerings. Vesta Holdings and its affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 22-11019) on Oct. 30, 2022. In the petitions signed by their chief financial officer, Michael Hines, the Debtors disclosed between $100 million and $500 million in both assets and liabilities. Judge Laurie Selber Silverstein oversees the cases. The Debtors tapped Ropes and Grapy, LLP and Potter Anderson & Corroon, LLP as bankruptcy counsels; Province, LLC as financial advisor; and Omni Agent Solutions, Inc. as claims, noticing and administrative agent. Colbeck Strategic Lending Offshore Mini-Master AIV, L.P., Colbeck Strategic Lending II Master, L.P., CION Investment Corporation and 34th Street Funding, LLC, as DIP Lenders, are represented by Akin Gump Strauss Hauer and Feld, LLP and Blank Rome, LLP. VICE MEDIA: Taps Interim Finance Chief as it Searches for Buyer --------------------------------------------------------------- Alexander Saeedy of The Wall Street Journal reports that Vice Media has hired an executive from turnaround specialist AlixPartners as its interim finance chief as the struggling media company looks for a buyer, according to people familiar with the matter. AlixPartners Director Mark Del Priore fills a vacancy left by Bruce Dixon, who is now the media company's co-chief executive, according to an internal memo seen by The Wall Street Journal. Mr. Del Priore will work with Vice Media management in "making decisions for company finances and overseeing strategic plans to improve the company’s financial health," according to the memo. About Vice Media Vice Media Group LLC -- https://www.vicemediagroup.com/ -- is an American-Canadian digital media and broadcasting company. VIDEO RIVER: Posts $767K Net Income in 2022 ------------------------------------------- Video River Networks Inc. has filed with the Securities and Exchange Commission its Annual Report on Form 10-K disclosing net income of $767,121 on $3.87 million of total revenue for the year ended Dec. 31, 2022, compared to net income of $2.21 million on $7.48 million of total revenue for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $3.42 million in total assets, $423,379 in total liabilities, and $3 million in total stockholders' equity. Newhall, California-based DylanFloyd Accounting & Consulting, the Company's auditor since 2019, issued a "going concern" qualification in its report dated April 15, 2023, citing that the Company has an accumulated deficit of $ 16,394,409 for the year ended Dec. 31, 2022. These factors raise substantial doubt about the Company's ability to continue as a going concern. A full-text copy of the Form 10-K is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/0001084475/000149315223012663/form10-k.htm About Video River Headquartered in Torrance, California, Video River Networks, Inc. is a technology holding firm that operates and manages a portfolio of Electric Vehicles, Artificial Intelligence, Machine Learning and Robotics ("EV-AI-ML-R") assets, businesses and operations in North America. The Company's current and target portfolio businesses and assets include operations that design, develop, manufacture and sell high-performance fully electric vehicles and design, manufacture, install and sell Power Controls, Battery Technology, Wireless Technology, and Residential utility meters and remote, mission-critical devices mostly engineered through Artificial Intelligence, Machine Learning and Robotic technologies NIHK's current technology-focused business model is a result of its board resolution on Sept. 15, 2020 to spin-in/off its specialty real estate holding business to an operating subsidiary and then pivot back to being a technology company. VILLAS OF COCOA: First Amended Plan Confirmed by Judge ------------------------------------------------------ Judge Tiffany P. Geyer has entered an order confirming the First Amended Plan of Reorganization of the Villas of Cocoa Village LLC. The Plan is hereby modified in regards to the treatment of Class 2 and Section 5.2 – Secured Tax Claims, as follows pursuant to the Debtor's Amendment No. 1 to First Amended Plan filed on March 15, 2023, and Section 5.2 of the Plan is replaced in entirety with the following: Class 2 consists of the Allowed Secured Claims of the Brevard County Tax Collector and associated Tax Certificate Holders. * In respect to Brevard County Tax Collector: The Allowed Secured Claims of the Brevard County Tax Collector, which are for 2022 real estate taxes, shall be paid at the applicable Florida statutory rate of interest (18% per annum beginning April 1, 2023) beginning on the Effective Date with equal monthly payments that begin as of the date on which the sale of Unit 3 and Unit 4 have closed, and amortized over and continuing monthly for 36 months thereafter until the earlier of either (a) the close of the sale of each respective Unit securing the respective Allowed Secured Claim of the Brevard County Tax Collector, at which time the balance of such respective Allowed Secured Claim shall be paid, or (b) such Allowed Secured Claims are paid in full. The Debtor estimates the monthly payments to be approximately $500 per month. The Brevard County Tax Collector does not intend to, but may in its sole and absolute discretion, sell tax certificates for its Allowed Secured Claims; and in the event of such a sale, then upon the Brevard County Tax Collector issuing any tax certificate in respect to an Allowed Secured Claim of the Tax Collector treated under this Section 5.2(a), such Claim shall cease to be treated under this Section 5.2(a) and shall be treated under Section 5.2(b). * In respect to the Tax Certificate Holders: The Allowed Secured Claims of Class 2 in respect to Tax Certificate Holders shall be paid in full and with interest at the rate of 5% per annum (or at the rate otherwise specified in the applicable certificate, if such rate is higher than 5%) at the close of each respective Unit securing the respective Allowed Secured Claim(s). The Plan is further modified in regards to the treatment of Class 1 and Section 5.1 – D&S, as follows pursuant to the Debtor's Amendment No. 2 to First Amended Plan filed on March 16, 2023: * On page 7 of the Plan, in the second full paragraph of Section 5.1 that begins "The parties agree" the following amendments are hereby made: -- The first sentence of said paragraph is amended to include the following phrase at the end of the sentence: and the Debtor shall not object to the claim of D&S and the D&S Allowed Secured Claim is hereby fully and finally allowed. -- The last sentence of said paragraph is deleted in entirety and replaced with the following: D&S shall not be entitled to recover additional attorneys' fees and costs after the Effective Date except as provided in the loan agreements between D&S and the Debtor. * On page 8 of the Plan, in the second to last paragraph that begins "Debtor shall sell" the last sentence of said paragraph references Updated Projections "supplied with the Disclosure Statement." Article 5.1 is hereby amended to clarify that the reference is made to the Updated Projections as supplied as Exhibit A of the Plan, not the Disclosure Statement. * On page 8 of the Plan, in the last paragraph that begins "Each release price" the following amendment are hereby made: -- The following sentences are added to the beginning of said paragraph: The Allowed Secured Claim and the Super-priority Claim shall be treated as a single loan for purposes of applying payments received from the Debtor. The schedule for timing of the payment of release prices is not an amortization schedule. -- The following sentence is added to the end of said paragraph: For the avoidance of doubt the entire Allowed Secured Claim of D&S shall be paid in full prior to payment of any remaining balances of Class 3 as provided in Section 5.3(3). * On page 9 of the Plan, the paragraph that begins "If Debtor defaults on its obligations" is deleted in entirety and replaced with the following: If Debtor defaults on its obligations to D&S as provided in this Plan, D&S shall provide at least 15 days' written notice for the Debtor cure its default. Notwithstanding Sections 11.2 and 13.1 of the Plan, if the Debtor fails to timely cure the default, D&S may exercise its rights against the Debtor under D&S's loan documents, first and second mortgage, and under this Plan, even outside of the Bankruptcy Case, as the automatic stay shall be and is waived, annulled, and terminated as to D&S and the injunction in lieu of that stay shall immediately terminate upon the occurrence of such an uncured default, even if the Debtor's case converts to a case under Chapter 7. For the avoidance of doubt, in the event of a default by the Debtor under this Section 5.1 which is not timely cured, D&S shall not be required to reopen the Bankruptcy Case nor seek affirmative relief from the Court in order to commence foreclosure, receivership, or other proceedings to collect on its claim. In the event the Bankruptcy Case is reopened for some other purpose after a default under this Section 5.1 that is not timely cured, the Deposit provided for in Section 11.3 shall be in an amount of $7,500. Moreover, D&S shall not be subject to the waiver and release language of Article 12 of this Plan. A copy of the Plan Confirmation Order dated April 17, 2023 is available at https://bit.ly/40nSNfv from PacerMonitor.com at no charge. About The Villas of Cocoa Village The Villas of Cocoa Village, LLC filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-03286) on Sept. 12, 2022. In the petition filed by Robert D. Harvey, authorized member, the Debtor disclosed between $500,000 and $1 million in assets and between $1 million and $10 million in liabilities. Robert Altman has been appointed as Subchapter V trustee. Judge Tiffany P. Geyer oversees the case. Winderweedle, Haines, Ward & Woodman, PA serves as the Debtor's counsel. The U.S. Trustee for Region 21 appointed an official committee of unsecured creditors in the Debtor's Chapter 11 case on Nov. 16, 2022. The committee is represented by Shutts & Bowen, LLP. VIRGIN ORBIT: Files Chapter 11 Plan, Bids Due May 14 ----------------------------------------------------- Virgin Orbit Holdings, Inc. and its U.S. subsidiaries, a responsive space launch provider, on April 20 disclosed that it filed a plan, which provides for, among other things, resolution of outstanding claims and interests (the "Plan") and a related Disclosure Statement in the U.S. Bankruptcy Court for the District of Delaware ("the Court"). The Plan and Disclosure Statement are subject to Court approval. As previously announced, the Company is pursuing a competitive sale process in order to maximize value for all stakeholders. The Company has proposed a May 4th deadline for indications of interest ("IOI") and has asked the Court to approve bid procedures including the IOI deadline and a bid deadline of May 14, 2023. Any sale transaction will be implemented according to the Plan or according to a separate sale order under section 363 of the Bankruptcy Code. Pursuant to the proposed Plan, the sale proceeds will be distributed in accordance with the Plan and any applicable sale order. Dan Hart, chief executive of Virgin Orbit, said, "We continue to make important progress and remain focused on positioning the Company to complete our sale process to the benefit of all stakeholders. We expect the filing of the Plan and Disclosure Statement will help us to efficiently conclude the Chapter 11 process once we have completed the sale of the Company. We remain committed to working with our investors and creditors throughout this process to achieve an optimal outcome for everyone." A Court hearing to consider approval of the Disclosure Statement related to the Plan is currently scheduled for May 24, 2023. Following Court approval of the Disclosure Statement, Virgin Orbit will distribute the Plan and Disclosure Statement to voting creditors for their consideration. The full terms of the Plan and Disclosure Statement are available online at https://cases.ra.kroll.com/virginorbit/. As previously announced, on April 4, 2023, the Company and its U.S. subsidiaries filed a voluntary proceeding under Chapter 11 of the U.S. Bankruptcy Code ("Chapter 11") in the United States Bankruptcy Court in the District of Delaware in order to effectuate a sale of the business. For more information about Virgin Orbit's Chapter 11 case, please visit https://cases.ra.kroll.com/virginorbit/ or contact Kroll, the Company's noticing and claims agent, at +1 833-570-5269 (Toll Free), +1 646-440-4773 (International) or by e-mail at VirginOrbitInfo@ra.kroll.com. About Virgin Orbit Virgin Orbit Holdings, Inc (Nasdaq: VORB) -- http://www.virginorbit.com/-- operates one of the most flexible and responsive space launch systems ever built. Founded by Sir Richard Branson in 2017, the Company began commercial service in 2021, and has already delivered commercial, civil, national security, and international satellites into orbit. Virgin Orbit's LauncherOne rockets are designed and manufactured in Long Beach, California, and are air-launched from a modified 747-400 carrier aircraft that allows Virgin Orbit Holdings, Inc., to operate from locations all over the world in order to best serve each customer's needs. Virgin Orbit Holdings, Inc., and its affiliates sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10405) on April 4, 2023. In the petition filed by Daniel M. Hart, as chief executive, the Debtor reported total assets amounting to $242,978,000 and total debt amounting to $153,491,000 as of Sept. 30, 2022. Virgin Orbit is represented by Latham & Watkins as restructuring counsel, Young Conaway Stargatt & Taylor, LLP as local restructuring counsel, Alvarez & Marsal as restructuring advisor, and Ducera as investment banker. Kroll is the claims agent. Virgin Group is represented by Davis Polk & Wardwell as restructuring counsel, Morris, Nichols, Arsht & Tunnell as local restructuring counsel, and FTI Consulting as financial advisor. VITAL PHARMACEUTICALS: Seeks to Extend Plan Exclusivity to August 4 ------------------------------------------------------------------- Vital Pharmaceuticals, Inc. and its affiliates ask the U.S. Bankruptcy Court for the Southern District of Florida to extend their exclusive periods within which to file a chapter 11 plan and solicit acceptances thereof to August 4, 2023 and October 6, 2023, respectively. Unless extended, the Debtors' exclusive filing period ends on May 8, 2023 and their exclusive solicitation period ends on July 10, 2023. The Debtors claimed that their capital structure is complex, and they are subject to numerous liabilities that need to be addressed during the pendency of the chapter 11 cases. The Debtors stated that their chapter 11 cases are further complicated by numerous complex litigation matters. The Debtors explained that their chapter 11 cases involve numerous active creditor constituents, including, the official committee of unsecured creditors, the pre- and post-petition lenders, Monster Energy Company, and certain other litigation claimants, as well as a multitude of counterparties to the Debtors' contracts and leases. The Debtors also stated that they are in the midst of running a competitive sale and marketing process, with the goal of consummating a going-concern transaction for the benefit of all stakeholders. Vital Pharmaceuticals, Inc. is represented by: George A. Davis, Esq. Tianjiao Li, Esq. Brian S. Rosen, Esq. Jonathan J. Weichselbaum, Esq. LATHAM & WATKINS LLP 1271 Avenue of the Americas New York, NY 10020 Tel: (212) 906-1200 Email: george.davis@lw.com tj.li@lw.com brian.rosen@lw.com jon.weichselbaum@lw.com – and – Andrew D. Sorkin, Esq. LATHAM & WATKINS LLP 555 Eleventh Street, NW, Suite 1000 Washington, D.C. 2004 Tel: (202) 637-2200 Email: andrew.sorkin@lw.com – and – Whit Morley, Esq. LATHAM & WATKINS LLP 330 North Wabash Avenue, Suite 2800 Chicago, IL 60611 Tel: (312) 876-7700 Email: whit.morley@lw.com - and - Jordi Guso, Esq. Michael J. Niles, Esq. BERGER SINGERMAN LLP 1450 Brickell Avenue, Suite 1900 Miami, FL 33131 Tel: (305) 755-9500 Email: jguso@bergersingerman.com mniles@bergersingerman.com About Vital Pharmaceuticals Inc. Since 1993, Florida-based Vital Pharmaceuticals, Inc., doing business as Bang Energy and as VPX Sports, has developed performance beverages, supplements, and workout products to fuel high-energy lifestyles. VPX Sports is the maker of Bang energy drinks, among other consumer products. Vital Pharmaceuticals, Inc., along with certain of its domestic subsidiaries and affiliates, filed voluntary petitions for protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Lead Case No. 22-17842) on Oct. 10, 2022. VPX estimated $500 million to $1 billion in assets and liabilities as of the bankruptcy filing. The Hon. Scott M. Grossman is the case judge. The Debtors tapped Latham & Watkins, LLP as general bankruptcy counsel; Berger Singerman, LLP as local counsel; Haynes and Boone, LLP and Faulkner ADR Law, PLLC as special counsels; Huron Consulting Group, Inc., as CTO services provider; and Rothschild & Co US, Inc., as investment banker. Stretto, Inc., is the notice, claims and solicitation agent. The U.S. Trustee for Region 21 appointed an official committee of unsecured creditors on Nov. 1, 2022. The committee tapped Lowenstein Sandler, LLP as general bankruptcy counsel; Sequor Law, P.A. as local counsel; and Lincoln Partners Advisors, LLC as financial advisor. VOYAGER DIGITAL: 2nd Circuit Puts $1-Bil. Binance Deal on Hold -------------------------------------------------------------- Brian Steele of Law360 reports that the Second Circuit on Tuesday, April 11, 2023, swiftly tossed aside an emergency request from bankrupt crypto lender Voyager Digital Holdings Inc. to lift a stay of its Chapter 11 plan ahead of a deadline to close a deal transferring $1 billion in customer accounts to Binance. US, finding that the court has no jurisdiction to hear the appeal. Voyager Digital Holdings Inc. asked the Second Circuit to weigh in on a dispute with the U.S. government that has thrown a wrench into the planned $1 billion transfer of customer accounts to fellow crypto firm Binance US. As previously reported in the TCR, US District Judge Jennifer Rearden on Monday, March 27, 2023, granted the US government's request for a stay pending appeal of Voyager's recently approved bankruptcy plan, court papers show. The stay is a blow to Voyager, which has been trying to exit bankruptcy and repay its customers since filing for Chapter 11 protection last 2022. 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. WORTH COLLECTION: Bankruptcy Trustee Sues Buyout Firms ------------------------------------------------------ Lisa Fickenscher of the New York Post reports that a bankruptcy trustee who has sued sales reps at a fizzled fashion firm for commissions they earned three years ago is now going after buyout firms that allegedly put the company under. Worth Collection, an upscale, New York-based women's apparel label that has gone out of business, has lately seen its bankruptcy trustee threaten to sue ex-staffers over sales commissions dating back to early 2020 -- with some getting written offers for cash settlements in the tens of thousands of dollars, according to court filings. Now, US Bankruptcy Trustee Douglas Tabachnik is alleging that Worth Collection was pillaged by a pair of private equity firms -- L Catterton Management and New Water Capital -- in a leveraged buyout that was "rife with fraud," according to lawsuits filed against the firms. L Catterton, a $33 billion fund whose holdings include Equinox and Birkenstock, bought Worth in 2006 and sold it to Boca Raton, Fla.-based New Water in September 2016 for approximately $40 million, according to a WWD report. But Worth became almost immediately "insolvent" after New Water saddled the company with a massive debt load and L Catterton used it as a piggy bank to pay insiders -- officers and directors on Worth's board, according to court filings. The heavily redacted filings don't reveal how much money the former Worth insiders allegedly took, but the trustee claims they "approved and directed" Worth to "enter into a transaction that was so 'one-sided' such that fraudulent intent may be inferred." U.S. Bankruptcy Trustee Douglas Tabachnik declined to comment on the allegations against the buyout firms. His lead counsel, Harley Goldstein of Goldstein & McClintock, said the redactions were at the request of Catterton and New Water and that Tabachnik "had hoped to make additional portions of those complaints public," but that those efforts "have not yet borne fruit." New Water, which focuses on turnarounds of "lower or middle market companies" according to its website, did not respond to requests for comment. L Catterton also didn't comment. "It's a classic LBO complaint," said bankruptcy attorney Kenneth Rosen, in which Worth "took on $25 million in debt and the trustee says there wasn't a chance in hell that that wouldn't sink the company." It's the latest twist in a bizarre case in which the bankruptcy trustee has sued at least 200 former stylists over the sales commissions they earned shortly before Worth’s bankruptcy filing -- with some ex-employees receiving letters with cash demands that threaten to devastate their personal finances. Most of the women "have already spent their money and don't have it lying around," Michele Baena, Worth Collection’s top stylist who is being sued for $52,000, told The Post. "To be slapped with this is very distressing -- I've never been sued in my entire life." Founded in 1991, Worth catered to professional women who bought clothing from stylists or independent contractors. Customers would shop for the clothing at trunk shows typically held at their homes. The company was financially stable even though its growth began to slow down in 2012, according to the complaints. Prior to the leveraged buyout Worth's debt was $2.4 million in 2015 when it had revenues of $78.5 million, profits of $1.4 million, and $5 million in cash. "The staggering debt resulting from the LBO caused [Worth's] interest and financing-related expenses to skyrocket to $1.8 million," compared to $23,000, according to the complaints. In 2016, Worth lost $1.6 million, which grew to a $9.3 million loss the following year. Despite Worth's "dire financial condition" New Water continued to "drain the insolvent" company by charging it consulting fees, according to the complaints. Worth was forced into a Chapter 7 liquidation by its creditors in February 2020. The redactions in the court filings obscure how much New Water lost, said distressed debt expert Adam Stein-Sapir of Pioneer Funding Group. Still, "It's clear that the trustee is saying the private equity firms caused the financial ruin," and according to the complaint, "They are both culpable." Meanwhile, the stylists are scrambling to hire lawyers to represent them and feel unfairly targeted, several told The Post. At least 30 of the stylists who are being sued for between $8,000 and $20,000 recently retained a Delaware attorney to represent them as a group, former stylist Andrea Greenspan told The Post. Bankruptcy regulation allows creditors to look back and question payments a company makes 90 days prior to filing for bankruptcy protection and in this case the stylists were given the opportunity to sell the clothing at deep discounts and earn commissions of up to 50% just prior to the filing, according to court docs. "We were helping a company we loved that was going through hell," Greenspan said. "We are feeling anger and shock." About Worth Collection Ltd. The Worth Collection, LTD. provided direct sales and marketing services for custom-designed and ready-to-wear clothing. It offered women's luxury and sportswear apparel. The company offers its products through a network of sales associates. The Worth Collection, LTD., was forced into Chapter 7 bankruptcy by creditors on Feb. 14, 2020 (Bankr. D. Del. Case No. 20-bk-10337). On March 24, 2021, the Bankruptcy Court entered an Order for Relief against the Debtor, thereby allowing the Chapter 7 Case to proceed. On June 23, 2021, the Bankruptcy Court entered an order appointing Douglas T. Tabachnik, as the chapter 7 trustee to administer the Chapter 7 Case. Counsel to Chapter 7 trustee: Maria Aprile Sawczuk, Esq. Goldstein & McClintock LLLP 501 Silverside Road, Suite 65 Wilmington, DE 19809 Telephone: (302) 444-6710 E-mail: marias@goldmclaw.com - and - Harley J. Goldstein, Esq. Daniel C. Curth, Esq. Amrit S. Kapai, Esq. Steven Yachik, Esq. 111 W. Washington Street, Suite 1221 Chicago, IL 60602 Telephone: (312) 337-7700 E-mail: harleyg@goldmclaw.com danc@goldmclaw.com amritk@goldmclaw.com steveny@goldmclaw.com ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. 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. 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