/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/230427.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, April 27, 2023, Vol. 27, No. 116 Headlines 111-121 E. CONGRESS: 'SARE' Files Subchapter V Case 4924 S. MARTIN LUTHER: Kicks Off Subchapter V Bankruptcy ALL-CARE PHARMACY: Court OKs Cash Collateral Access Thru June 30 ALPINE 4 HOLDINGS: Gets Another Noncompliance Notice From Nasdaq ARMSTRONG FLOORING: Chapter 11 Bankruptcy Heading to Dissolution ARUZE GAMING: Seeks to Hire Withum Smith+Brown as Tax Accountant ASIA PACIFIC: Case Summary & Nine Unsecured Creditors ASLM INVESTMENTS: Files Emergency Bid to Use Cash Collateral ATLAS SYSTEMS: Starts Subchapter V Case Amid Avaya Dispute ATRIX TRUCKING: Case Summary & Four Unsecured Creditors AVENIR MEMORY: Case Summary & 20 Largest Unsecured Creditors BED BATH: Moody's Lowers PDR to D-PD Following Bankruptcy Filing BLOCKFI INC: Gets More Time to Explore Possible Restructuring, Sale BLUE LIGHTNING: Court OKs Interim Cash Collateral Access BRIGHT MOUNTAIN: Buys Insights and Agency Units From Big Village BROOKFIELD CORP: Defaults on $161M Office Buildings Debt BROOKLYN PARK: Seeks to Hire A. El Kady, CPA as Accountant BROOKLYN PARK: Taps Joseph J. Schwartz as Litigation Counsel BROWN BIDCO: S&P Affirms 'B+' ICR, Outlook Stable CALAMP CORP: Board Adopts Amended Bylaws CARVANA CO.: Prepares $479 Million Bond for Sale CBC RESTAURANT: Seeks to Hire Hilco as Financial Advisor CELSIUS NETWORK: Faces DOJ Opposition to Executive Bonus Plan CELSIUS NETWORK: UCC Gets Nod to File Fraud Claims vs. Lender CENPORTS COMMERCE: Case Summary & 20 Largest Unsecured Creditors CINEWORLD GROUP: Class 5A Unsecureds Will Get 0.3% to 0.5% in Plan CINEWORLD GROUP: Ends Marketing for 'Rest of World' Business CINEWORLD: Receives Competing $2.26-Bil. Exit Financing Offer CNX RESOURCES: Fitch Affirms LongTerm IDR at 'BB+', Outlook Stable CORNERSTONE ONSITE: $650,000 DIP Loan from Southern Spear OK'd CRYPTO CO: Borrows Additional $55K From AJB Capital CUENTAS INC: Inks Operating Agreement for Brooksville Development CUSTOM SPRAY: David Sousa Named Subchapter V Trustee DAVID'S BRIDAL: To Close All Stores in Chapter 11 Absent Buyer DEVILLE CORP: Has Deal on Cash Collateral Access DIAMOND ELITE: Voluntary Chapter 11 Case Summary DIAMOND SPORTS: Seeks Approval to Hire Porter Hedges as Co-Counsel DIAMOND SPORTS: Seeks to Hire Wilmer as Special Counsel DIAMOND SPORTS: Seeks to Tap Deloitte Tax LLP as Tax Advisor DIAMOND SPORTS: Seeks to Tap Moelis & Company as Investment Banker DIAMOND SPORTS: Taps Deloitte Consulting LLP as Consultant DIAMOND SPORTS: Taps Deloitte Financial Advisory as Accountant DIAMOND SPORTS: Taps LionTree Advisors as Investment Banker DIAMOND SPORTS: Taps Paul Weiss Rifkind Wharton as Legal Counsel DNP EATS: Files Emergency Bid to Use Cash Collateral EDGEWATER CONSTRUCTION: Taps Touron Law as Construction Counsel EMERALD DEBT: Fitch Assigns 'BB(EXP)' LongTerm IDR, Outlook Stable ENDO INTERNATIONAL: Committee Taps Lowenstein as Special Counsel ENVISION HEALTHCARE: Mulling Debt-for-Equity Plan in Chapter 11 EVOKE PHARMA: USPTO Issues Patent for GIMOTI Nasal Spray FIELDERS CHOICE: Case Summary & Seven Unsecured Creditors FIVE64 LLC: Seeks $650,000 DIP Loan from Cartwheel Acquisition FTX GROUP: Exchange Revival Plan Draws Possible Bid From Tribe G & G TOWERING: Case Summary & Two Unsecured Creditors GALAXY NEXT: Rodefer Moss Replaces Somerset CPAs as Auditor GARCIA GRAIN: Seeks Cash Collateral Access GHX ULTIMATE: Moody's Rates First Lien Loans 'B2', Outlook Stable GHX ULTIMATE: S&P Downgrades ICR to 'B-', Outlook Stable GLENS FALLS: Case Summary & 14 Unsecured Creditors GOLDEN KEY: Taps Aiken Warner Leonard as Accounting Consultant GREEN PROPERTY: Files for Chapter 11 to Stop Foreclosure GUARDIAN FUND: Chapter 11 Case Consolidated With Involuntary H-CYTE INC: Sells $135K Convertible Promissory Notes to 3 Investors HAWTHORNE HANGAR: Seeks Approval to Hire Real Estate Brokers HOT'Z POWER WASH: Seeks to Hire Elna Tax Services as Accountant HOWARD HUGHES: Moody's Lowers CFR to Ba3, Outlook Remains Stable HOWMET AEROSPACE: S&P Alters Outlook to Pos., Affirms 'BB+' ICR HUMANIGEN INC: Has Until August 21 to Regain Nasdaq Compliance IMAGEFIRST HOLDINGS: Moody's Rates New Sr. Secured Term Loans 'B3' INTEGRATED VENTURES: Effects Reverse Common Stock Split INTERMEDIA HOLDINGS: S&P Lowers ICR to 'CCC+', Outlook Stable JDI DATA: Court Okays Appointment of Chapter 11 Trustee LANNETT CO: NYSE Suspends Trading, Starts Delisting Proceedings LEVINSON & SANTORO: Taps Kalina & Mattia as Special Counsel LTL MANAGEMENT: Johnson & Johnson Wins Baby Power Trials Pause MERMAID BIDCO: S&P Affirms 'B-' ICR on Refinancing, Outlook Stable MICAH PROPERTY: Voluntary Chapter 11 Case Summary MJW ENTERPRISES: David Sousa Named Subchapter V Trustee NATIONAL PHARMACY: Gets OK to Hire Geaux as Tax Credit Specialist NATIONAL PHARMACY: Taps Stirling Properties as Real Estate Agent NEUBERT CONSTRUCTION: Asks Court to Approve Employment of Counsel OFFICE INTERIORS: Office Furniture Company in Chapter 11 OMNIQ CORP: Safe City System Adds Shot Detection Technology OUR CITY MEDIA: Court OKs Cash Collateral Access Thru July 31 PILL CLUB PHARMACY: Wins Interim Cash Collateral Access POMONA VALLEY: Tamar Terzian Appointed as Patient Care Ombudsman PURDUE PHARMA: Launch of OxyContin Copies Endangers Opioid Deal R1 RCM: Moody's Affirms 'Ba2' CFR & Alters Outlook to Negative RED INTERMEDIATECO: Moody's Alters Outlook on 'B3' CFR to Negative RESTORATION HARDWARE: Moody's Alters Outlook on 'Ba3' CFR to Neg. SCST REALTY: Unsecureds to Get Nothing in Liquidating Plan SEMRAD LAW: Case Summary & 20 Largest Unsecured Creditors SHOE CITY: Shuts Down 39 Stores in Virginia, Maryland and D.C. Area SKILLZ INC: S&P Upgrades ICR to 'CCC+' After Distressed Exchange STARR GENERAL: Seeks Cash Collateral Access STARRY GROUP: Committee Taps M3 Advisory as Financial Advisor STARRY GROUP: Committee Taps McDermott Will & Emery as Counsel SVB FINANCIAL: Fight Over Seized Deposits to Test Authority of FDIC TRANS-LUX CORP: Yang Liu Quits as Director; Two New Directors Named TULEYRIES LAND: Hits Chapter 11 Bankruptcy Protection UKG INC: S&P Alters Outlook to Negative, Affirms 'B-' LT ICR UNION CIGAR: Seeks Cash Collateral Access UNITED PF: Moody's Lowers CFR to Caa2 & First Lien Debt to Caa1 URBAN COMMONS: Amends Plan to Include Other Priority Claims VISTAM INC: Commences Subchapter V Bankruptcy Proceeding WEWORK INC: Falls Short of Nasdaq Minimum Bid Price Requirement [^] Recent Small-Dollar & Individual Chapter 11 Filings ********* 111-121 E. CONGRESS: 'SARE' Files Subchapter V Case --------------------------------------------------- 111-121 E. Congress LLC filed for chapter 11 protection in the District of Arizona. The Debtor elected on its voluntary petition to proceed under Subchapter V of chapter 11 of the Bankruptcy Code. Congress Street Clubs, LLC ("CSC") filed a motion for a determination that the Debtor is a single asset real estate. The Debtor owns real estate located at 111-121 E. Congress Street, Tucson, Arizona. The building is to the North of this Court's building. The building is a nightclub/bar called Zen Rock. The nightclub is currently operated by Rama Team LLC. CSC was the prior tenant in the building. The Debtor wrongfully terminated CSC's lease during the Covid lockdown imposed by the State. CSC sued Debtor in the Superior Court in Arizona, Pima County, Case No. C20204097. On Nov. 15, 2022 the Superior Court entered judgment in favor of CSC and against Debtor in the amount of $2,170,641. The judgment is on appeal to the Arizona Court of Appeals, No. 2 CA-CV 2023-0007. The action and appeal are stayed pursuant to 11 U.S.C. Sec. 362(a). The Debtor did not post a supersedeas bond in order obtain a stay pending appeal. The Debtor filed its chapter 11 bankruptcy petition on April 7, 2023. In its voluntary chapter 11 petition, Debtor did not check the "single asset real estate" box, but did purport to elect to proceed in subchapter V of Chapter 11. To CSC's knowledge, Rama, like CSC before it, was the sole tenant in Debtor's building. The Debtor operated no business in the building other than leasing it. To CSC's knowledge, the Debtor has no other business. According to court filings, 111-121 E. Congress estimates $1 million to $10 million in debt to 1 to 49 creditors. The petition states that funds will be available to unsecured creditors. A telephonic meeting of creditors under 11 U.S.C. Section 341(a) is slated for May 11, 2023 at 10:30 a.m. About 111-121 E. Congress 111-121 E. Congress, LLC filed a voluntary petition for Chapter 11 protection (Bankr. D. Ariz. Case No. 23-02230) on April 7, 2023, with up to $10 million in both assets and liabilities. Jody A. Corrales, Esq., at DeConcini McDonald Yetwin & Lacy, PC, serves as the Debtor's counsel. 4924 S. MARTIN LUTHER: Kicks Off Subchapter V Bankruptcy -------------------------------------------------------- 4924 S. Martin Luther King LLC filed for chapter 11 protection in the Northern District of Illinois. The Debtor’s business is real estate which consists of six apartments four of which are currently rented. The property is located at 4924 S. Martin Luther King Drive, Chicago Illinois 60615. U.S. Bank National Association is owed $1,801,801.59 on a mortgage that matured in July 2022. According to U.S. Bank, the broker price opinion (BPO) shows an as is market value for the Property of $1,450,000.00, which means that the Debtor has no equity in the Property. U.S. Bank has filed a motion for an order terminating the automatic stay to permit it to complete its foreclosure on the Property and enforce its liens and security interest. About 4924 S. Martin Luther King 4924 S. Martin Luther King LLC is a Single Asset Real Estate that owns apartments at 4924 S. Martin Luther King Drive, Chicago Illinois 60615. 4924 S. Martin Luther King LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 23-04726) on April 10, 2023. In the petition signed by Faris Faycurry, president, the Debtor disclosed up to $10 million in both assets and liabilities. The petition states that funds will be available to unsecured creditors. Judge Janet S. Baer oversees the case. Paul M. Bach, Esq., at Bach Law Offices, Inc., is the Debtor's legal counsel. ALL-CARE PHARMACY: Court OKs Cash Collateral Access Thru June 30 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Arizona authorized All-Care Pharmacy, LLC, a.k.a. Avrio Pharmacy, to use cash collateral on a final basis in accordance with the budget, with a 10% variance, through June 30, 2023. The Debtor and Western Alliance Bank stipulate and agree that as of the Petition Date, the Debtor owed WAB in the aggregate at least $217,525, plus accrued and accruing interest, fees, and costs, including without limitation post-petition interest, attorneys' fees and costs incurred pursuant to the terms of the Business Loan Agreement and Promissory Note executed by the Debtor, as borrower, and WAB, as lender, dated July 6, 2017. The Debtor and WAB stipulate and agree that WAB holds an allowed secured claim against the Debtor's bankruptcy estate in the amount of the WAB Claim Amount, plus all post-petition accruing interest, fees, and reasonable attorneys' fees and costs. The Debtor and WAB further stipulate and agree that the WAB Claim Amount is secured by a valid pre-bankruptcy perfected first position lien and security interest against all of the Debtor's personal property. The Debtor and McKesson Corporation stipulate and agree that as of the Petition Date, the Debtor owed McKesson in the aggregate amount of $539,305 pursuant to the terms of the Debtor's Customer Application dated May 18, 2017, with McKesson. The Debtor and McKesson stipulate and agree that McKesson holds an allowed claim against the Debtor's bankruptcy estate in the amount of the McKesson Claim Amount. The Debtor and McKesson further stipulate and agree that McKesson holds a pre-bankruptcy perfected second position lien and security interest against all of the Debtor's personal property. McKesson and the Debtor reserve all rights regarding: (i) McKesson's entitlement to post-petition accruing fees, costs, and reasonable attorneys' fees; (ii) the value of the McKesson Collateral; and (iii) the extent (if any) to which McKesson holds an allowed secured claim against the Debtor's bankruptcy estate. The Secured Creditors are granted replacement liens on and security interests in all existing and hereinafter acquired property and assets of the Debtor of every kind and character, to the extent and in the same validity, priority, and enforceability that they held liens on and security interests in such kind and character of property and assets of the Debtor as of the commencement of the case. The Secured Creditors are also granted replacement liens on and security interests in the Debtor's litigation claims pending before the Maricopa County Superior Court, Case No. CV2022-009869 and in any associated arbitration proceeding in the same validity, priority, and enforceability that they held liens on and security interests in assets of the Debtor as of the commencement of the case, but only to the extent of diminution in such creditors' collateral positions against the Debtor during the pendency of the bankruptcy case. The Debtor will make a payment to WAB in the amount of $3,440, the amount of the monthly payment under the parties' prebankruptcy agreements, on or before each of: May 5, 2023 and June 5, 2023. WAB and the Debtor reserve all rights regarding WAB's application of the payments. The Debtor's right to use of cash collateral under the Order will cease automatically upon the earlier of: (i) July 1, 2023; (ii) the Debtor's failure to timely pay the WAB Monthly Payment to WAB and the Debtor's failure to pay is not cured within five business of written notice sent by WAB; (iii) the granting of stay relief in favor of WAB or McKesson with respect to their respective collateral; or (iii) the conversion of the Chapter 11 case to a proceeding under Chapter 7 of the Bankruptcy Code. A copy of the order is available at https://bit.ly/43V78TA from PacerMonitor.com. The Debtor projects total cash disbursements from checking, on a weekly basis, as follows: $71,927 for the week ending April 28, 2023; $140,710 for the week ending May 5, 2023; $44,277 for the week ending May 12, 2023; $188,533 for the week ending May 19, 2023; and $58,471 for the week ending May 26, 2023. About All-Care Pharmacy, LLC All-Care Pharmacy, LLC operates one of the few compounding pharmacies in Arizona. All-Care Pharmacy sells and dispenses specialty medications to treat such diseases as human immunodeficiency virus, hepatitis C, and Crohn's disease. All-Care Pharmacy also sells and dispenses commercial fertility products, as well as Compounded medications for human and animal populations. Over the years, it has focused more of its operations on compounding pharmaceuticals for human and veterinary and pet uses. All-Care Pharmacy sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Ariz. Case No. 23-02061) on March 31, 2023. In the petition signed by Raef Hamaed, its member, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Brenda K. Martin oversees the case. Michael A. Jones, Esq., at Allen, Jones and Giles, PLC, represents the Debtor as legal counsel. ALPINE 4 HOLDINGS: Gets Another Noncompliance Notice From Nasdaq ---------------------------------------------------------------- Alpine 4 Holdings announced that on April 18 it received a notice from The Nasdaq Stock Market LLC indicating that, as a result of not having filed in a timely manner the Company's 2022 Annual Report on Form 10-K with the Securities and Exchange Commission, the Company is not in compliance with Nasdaq Listing Rule 5250(c)(1), which requires timely filing of all required periodic financial reports with the SEC. The April Notice stated that previously, the Nasdaq Staff had granted the Company an exception until May 22, 2023, to file its delinquent Form 10-Q for the period ended Sept. 30, 2022. As a result, any additional Staff exception to allow the Company to regain compliance with all delinquent filings, will be limited to a maximum of 180 calendar days from the due date of the Initial Delinquent Filing, or May 22, 2023. As a result of this additional delinquency, the Company is required to submit an update to its original plan to regain compliance with respect to the filing requirement. The Company currently plans to file both the Form 10-Q and the 2022 10-K as soon as practicable and to submit a plan to Nasdaq detailing the Company's plan to regain compliance with the Listing Rule. The April Notice has no immediate impact on the listing of the Company's Common Stock, which will continue to be listed and traded on The Nasdaq Capital Market under the symbol "ALPP," subject to the Company's compliance with the requirements outlined above. There is no assurance that the Company will file the Form 10-Q or the Form 10-K by any particular date or that Nasdaq will accept any plan that the Company may submit. About Alpine 4 Alpine 4 Holdings, Inc (formerly Alpine 4 Technologies, Ltd) is a publicly traded conglomerate that is acquiring businesses that fit into its disruptive DSF business model of drivers, stabilizers, and facilitators. Alpine 4 reported a net loss of $19.48 million in 2021 (as restated), a net loss of $7.65 million in 2020 (as restated), a net loss of $3.13 million in 2019, and a net loss of $7.91 million in 2018. In its Quarterly Report for the three months ended March 31, 2022, Alpine 4 said it has incurred significant recurring losses and negative cash flows from operations. These factors, the Company said, raise substantial doubt about its ability to continue as a going concern. ARMSTRONG FLOORING: Chapter 11 Bankruptcy Heading to Dissolution ---------------------------------------------------------------- Lisa Scheid of Lancaster Online reports that Armstrong Flooring is no longer in charge of its own affairs in bankruptcy court. A Delaware bankruptcy court judge has ordered Armstrong Flooring's bankruptcy to be converted from Chapter 11 to Chapter 7 because the U.S Trustee and a large creditor were unhappy with Armstrong's plan for paying out remaining funds. The order filed Monday puts a court-appointed trustee in charge of which creditors are paid and how much, if any. Under Chapter 7 of the U.S. Bankruptcy Code, a debtor's assets are liquidated to pay creditors. Under Chapter 11, the debtor, often a company, reorganizes and may pay some creditors. Armstrong Flooring reorganized through a sale of its assets in the summer. An interim trustee has been appointed by the court to settle Armstrong Flooring’s assets to maximize the return to Armstrong’s unsecured creditors. Armstrong Flooring had just $2 million in assets left as of early April 2023, according to court documents, and said it was administratively insolvent. It had, however, filed legal actions to get money it said it was owed from companies it had previously done business with. There are $21.5 million in allowed claims, according to court documents, which is a fraction of the $500 million in claims. Allowed claims are ones that the court has approved for payment in a reorganization. In March, Armstrong Flooring sought to dismiss the Chapter 11 case, saying there would not be sufficient proceeds to pay the secured debt and administrative and priority claims in full. Armstrong Flooring, which consists of bankruptcy attorneys, asked Judge Mary Walrath to dismiss the case rather than convert it to Chapter 7. It proposed paying some creditors after it had received money from 47 claw back claims, which are legal actions filed to get money from companies it says are owed. Armstrong Flooring also held out the prospect that it could recover money following the termination of its pension plan and an audit by the Pension Benefit Guaranty Corp., among other things, the U.S. Trustee said in court filings. One of its critical suppliers, Ohio-based Mexichem Specialty Resins Inc., objected to the dismissal. Mexichem wanted a third party review of the financial situation. Mexichem maintains it is owed about $2 million. Mexichem said dismissing the case would send the message that during a reorganizing bankruptcy vendors should demand all debtors pay cash in advance or risk not being paid for their administrative expense claims. The interim trustee has until Saturday to accept the appointment. Armstrong Flooring has until May 2 to file schedules of unpaid debts and by May 17 must file and transmit to the United States Trustee a final report. Last month, Walrath approved the sale of Armstrong Flooring Inc.’s 1-acre lot in Manheim Township to developer Robert Bowman. Armstrong Flooring has an agreement to sell the lot for $295,000 to Site Construction Properties L.P. Court documents show Bowman, president of Charter Homes & Neighborhoods, is the sole member of the company's general partner. The sale of the property came nearly eight months after the company sold most of its assets. In September 2022, Armstrong Flooring received $84,000 from the sale of equipment from its tech center that was not scooped up in the $107 million bankruptcy sale of its North American assets. The iconic international flooring company's North American assets, including local plants, were sold in a bankruptcy sale in July 2022 to West Hempfield-based AHF Products Inc. and Gordon Brothers Commercial & Industrial of Boston. About 500 U.S. workers transferred to AHF, according to court documents. The total for all of the company, including operations in Australia and China, was $203 million. The company filed for Chapter 11 bankruptcy in May 2022, citing supply chain challenges, the inflationary environment and continued headwinds from the COVID-19 pandemic. About Armstrong Flooring Armstrong Flooring, Inc. (NYSE: AFI) -- https://www.armstrongflooring.com/ -- is a leading global manufacturer of flooring products and one of the industry's most trusted and celebrated brands. The company continually builds on its resilient, 150-year legacy by delivering on its mission to create a stronger future for customers through adaptive and inventive solutions. Headquartered in Lancaster, Pennsylvania, Armstrong Flooring safely and responsibly operates eight manufacturing facilities globally. Armstrong Flooring and its affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 22-10426) on May 8, 2022. In the petition signed by Michel S. Vermette, president and chief executive officer, Armstrong Flooring disclosed $517,000,000 in assets and $317,800,000 in liabilities. Judge Mary F. Walrath oversees the cases. Skadden, Arps, Slate, Meagher and Flom, LLP is the Debtors' counsel. Riveron Consulting, LP is the financial advisor, Houlihan Lokey is the investment banker, and Epiq Corporate Restructuring, LLC, is the claims and noticing agent and administrative advisor. On May 18, 2022, the Office of the U.S. Trustee for Region 3 appointed an official committee of unsecured creditors in these Chapter 11 cases. The committee tapped Cole Schotz, PC as legal counsel and Province, LLC as financial advisor. On June 17, 2022, the U.S. Trustee appointed a committee of non-represented retirees in these Chapter 11 cases. The committee tapped Jenner & Block, LLP and Saul Ewing Arnstein & Lehr, LLP as legal counsels; and AlixPartners, LLP as financial advisor. ARUZE GAMING: Seeks to Hire Withum Smith+Brown as Tax Accountant ---------------------------------------------------------------- Aruze Gaming America, Inc. seeks approval from the U.S. Bankruptcy Court for the District of Nevada to employ Withum Smith+Brown, PC as its tax accountant. The Debtor requires a tax accountant to prepare its 2022 federal and state tax returns and provide other services. The Debtor anticipates that the preparation of the 2022 federal and state tax returns will be approximately $90,000. For additional services, the Debtor will be billed at Withum's standard hourly rates, which are as follows: Partners $405 - $900 Senior Managers $370 - $665 Managers/ Supervisors $205 - $394 Seniors/Staff $145 - $383 Administrative $80 - $383 Kenneth DeGraw, Esq., a partner at Withum, disclosed in the court filing that his firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached through: Kenneth DeGraw, Esq. Withum Smith+Brown, PC 200 Jefferson Park, Suite 400 Whippany, NJ 07981 Phone: (973) 898-9494 Fax: (973) 898-0686 Email: kdegraw@withum.com About Aruze Gaming America Las Vegas-based Aruze Gaming America, Inc. designs, develops and manufactures gaming machines. Aruze Gaming America sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Nev. Case No. 23-10356) on Feb. 1, 2023. In the petition signed by its chief executive officer, Yugo Kinoshita, the Debtor disclosed up to $10 million in assets and up to $50 million in liabilities. The bankruptcy filing is a part of Aruze's efforts to seek financial restructuring in the wake of a recent garnishment judgment against Aruze resulting from a separate judgment against Aruze's shareholder. Judge August B. Landis oversees the case. The Debtor tapped Matthew C. Zirzow, Esq., at Larson & Zirzow, LLC as legal counsel and Withum Smith+Brown, PC as tax accountant. The U.S. Trustee for Region 17 appointed an official committee to represent unsecured creditors in the Debtor's Chapter 11 case. The committee tapped Schwartz Law, PLLC and Sheppard, Mullin, Richter & Hampton LLP as legal counsels, and Province, LLC as financial advisor. ASIA PACIFIC: Case Summary & Nine Unsecured Creditors ----------------------------------------------------- Debtor: Asia Pacific Financial Management Group, Inc. 145 Aspinall Avenue Hagatna, GU 96910 Business Description: The Debtor provides professional advice based on proven financial principles to help clients plan for retirement years, for college expenses and for other specialized savings and investment goals. Chapter 11 Petition Date: April 25, 2023 Court: United States Bankruptcy Court District of Guam Case No.: 23-00005 Judge: Hon. Frances M. Tydingco-Gatewood Debtor's Counsel: Joyce C.H. Tang, Esq. CIVILLE & TANG, PLLC 330 Hernan Cortez Avenue, Suite 200 Hagatna, GU 96910 Tel: 671-472-8868 Email: jtang@civilletang.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Sandra McKeever, AIF as president and chief executive officer. A full-text copy of the petition containing, among other items, a list of the Debtor's nine unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/2G3IBVI/Asia_Pacific_Financial_Management__gubke-23-00005__0001.0.pdf?mcid=tGE4TAMA ASLM INVESTMENTS: Files Emergency Bid to Use Cash Collateral ------------------------------------------------------------ ASLM Investments Inc. asks the U.S. Bankruptcy Court for the Central District of California, Los Angeles Division, for authority to use the cash collateral of its secured creditors Open Bank, AJ Dudheker, and the City of Imperial. The Debtor requires the use of cash collateral to pay reasonable expenses during the ordinary course of its business in accordance with the budget, with a 15% variance. The Debtor has three related entities, also in Subchapter V bankruptcy before the Court: (I) ASLM Gas, Inc.; (2) CA Tcchies, Inc.; and (3) Highland Cargo Inc. The Debtor, ASLM Gas, CA Techies, and Highland have several mutual creditors, most notably Diamond Stone Capital. The Debtor estimates the value of its assets to be $4.435 million. The Debtor estimates the value of its liabilities to be $5.467 million in secured claims and $114,400 in unsecured claims. The COVID-19 pandemic, and subsequent inflation and rising gasoline prices, had a significant negative impact on the Debtor's related businesses. Without income from its tenant-related entity ASLM Gas, the Debtor had no income. In an effort to keep its businesses open, the Debtor took out several loans, which the Debtor is now unable to pay back. Due to the accumulating debts from weekly payments owed to lenders. The Debtor's operational expenses, and debts owed to the secured creditors, the Debtor was unable to meet its debt service obligations. In first position, the City of Imperial has a tax lien on the Debtor's real property in the amount of $50,000, for property taxes accrued in 2022. The Debtor does not propose making adequate protection payments to Imperial, but the Debtor will pay pre-petition taxes owed in full through its Plan of Reorganization. In second position, Open Bank holds a $4.117 million claim on the Debtor's assets, secured by a UCC financing statement filed December 27, 2021. Given the estimated value of the Debtor's assets of $4.435 million, Open Bank's claim is fully secured. The Debtor proposes monthly adequate protection payments to Open Bank in the amount of $24,251. In third position, AJ Dudheker has a $1.3 million claim against the Debtor's real property, secured by a 2022 deed of trust. Given the seniority of Open Bank and Imperial's liens, and the estimated value of the Debtor's assets, Dudheker's claim attaches to $267,719 of the Debtor's estate. The remaining $1.032 million of Dudheker's claim is fully undersecured. The Debtor proposes monthly adequate protection payments to Dudheker in the amount of $2,000. A copy of the motion is available at https://bit.ly/40N25lu from PacerMonitor.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. ATLAS SYSTEMS: Starts Subchapter V Case Amid Avaya Dispute ---------------------------------------------------------- Atlas Systems Inc. filed for chapter 11 protection in the Eastern District of Michigan. The Debtor elected on its voluntary petition to proceed under Subchapter V of chapter 11 of the Bankruptcy Code. The Debtor was established in 1999 as an independent distributor of new and use telephones and telephone systems. The Debtor purchases new and used telephones and telephone systems for refurbishment and resale. The Debtor services large and small businesses and individuals on a national basis from property in Auburn Hills, Michigan, which is leased from an affiliate, Atlas Property Holdings LLC. Christopher Klow own 40 percent of the Debtor's issued and outstanding stock, and Thomas Werthmann, II, holds the remaining sixty percent (60%) of the Debtor's issued and outstanding stock. Mr. Werthmann is the Debtor's President. Klow is the VP. The petition states that funds will be available to unsecured creditors. A telephonic meeting of creditors under 11 U.S.C. Section 341(a) is slated for May 4, 2023 at 10:00 a.m. Causes of Bankruptcy Filing Prior to the Petition Date and today, the Debtor regularly provided Avaya, Inc., brand products to its customers, and Avaya products account for approximately 20% of the Debtor's business. On January 31, 2019 Avaya commenced the litigation styled Avaya Inc. v. Raymond Bradley Pearce, et al., Case No. 3-: 19-CV-00565-SI, pending in the United States District Court for the Northern District of California, (the "Avaya Case"), naming the Debtor as a defendant. In the Avaya Case, Avaya claims, among other things, that the Debtor engaged in trademark infringement and counterfeiting. The Debtor denies the allegations made by Avaya in the Avaya Case and has vigorously defended itself in the Avaya Case. The Debtor determined in its business judgment that the continued defense of the Avaya Case had become unsustainable during a period of declining sales and increasing costs; and, as a result, a Chapter 11 case was filed to allow the Debtor to refocus on its operations by staying the Avaya Case, reorganizing the Debtor's business and dealing with credit claims, including Avaya's claims, in this Case. Avaya is involved in its own bankruptcy case styled In re Avaya, Inc., Case No. 23- 90088, pending in the United States Bankruptcy Court for the Southern District of Texas. About Atlas Systems Inc. Atlas Systems Inc. -- https://www.atlasphones.com -- was established in 1999 as an independent distributor of new and use telephones and telephone systems. Atlas Systems sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Mich. Case No. 23-43287) on April 10, 2023, with up to $10 million in both assets and liabilities. Christopher Klow, vice president of Atlas Systems, signed the petition. Judge Maria L. Oxholm oversees the case. John J. Stockdale, Jr, Esq., at Schafer and Weiner, PLLC, is the Debtor's legal counsel. ATRIX TRUCKING: Case Summary & Four Unsecured Creditors ------------------------------------------------------- Debtor: Atrix Trucking Corp 130 Birchwood Drive Maitland, FL 32751 Chapter 11 Petition Date: April 25, 2023 Court: United States Bankruptcy Court Middle District of Florida Case No.: 23-01540 Debtor's Counsel: Buddy D. Ford, Esq. BUDDY D. FORD, P.A. 9301 West Hillsborough Avenue Tampa, FL 33615-3008 Tel: (813) 877-4669 Fax: (813) 877-5543 Email: All@tampaesq.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by Charles E. Joseph as president. A full-text copy of the petition containing, among other items, a list of the Debtor's four unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/D6APUPQ/Atrix_Trucking_Corp__flmbke-23-01540__0001.0.pdf?mcid=tGE4TAMA AVENIR MEMORY: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Avenir Memory Care @ Fayetteville LP 11648 E. Shea Blvd., Suite 101 Scottsdale, AZ 85259 Business Description: The Debtor operates a nursing care facility. Chapter 11 Petition Date: April 25, 2023 Court: United States Bankruptcy Court District of Arizona Case No.: 23-02640 Judge: Hon. Brenda Moody Whinery Debtor's Counsel: Philip R. Rudd, Esq. SACKS TIERNEY P.A. 4250 N Drinkwater Blvd. 4th Floor Scottsdale, AZ 85251-3693 Tel: 480-425-2600 Email: Philip.Rudd@SacksTierney.com Estimated Assets: $10 million to $50 million Estimated Liabilities: $10 million to $50 million The petition was signed by David L. Craik as president and director of the General and Limited Partners. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/LRF63IA/AVENIR_MEMORY_CARE__FAYETTEVILLE__azbke-23-02640__0001.0.pdf?mcid=tGE4TAMA List of Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount 1. Bakewell Chemical Vendor $975 Company Inc 858 Black Onyx Av Springdale, AR 72764 Tel: 479-601-7459 2. Black Hills Energy Utility Provider $637 P.O. Box 7966 Carol Stream, IL 60197 3. BrightStar of Services $2,300 Washington County 4264 N. Frontage Road Fayetteville, AR 72703 Tel: 479-464-7800 Email: sean.trumbo@brightstarcare.com 4. City of Fayetteville Utility Provider $1,926 113 W. Mountain Street Fayetteville, AR 72701 Tel: 479-521-1758 Email: water_and_sewer_ maintenance@faye tteville-ar.gov 5. Direct Supply Inc Vendor $927 P.O. Box 88201 Milwaukee, WI 53288 Tel: 800-554-9439 6. Finkelstein Kern Services $897 Steinberg & Cunnigham P.O. Box 1 Knoxville, TN 37901 Tel: 865-525-0238 7. Janice Gilbert Refund $3,952 c/o Mark Gilbert 2359 Whispering Oaks Fayetteville, AR 72701 8. Jennifer Estep Services $751 11347 Ranchwood Road Prairie Grove, AR 72753 Tel: 479-601-2347 9. McKesson Medical Surgical Vendor $792 P.O. Box 204786 Dallas, TX 7532 Tel: 800-54-0418 10. Nabholz Construction Services $996 Company P.O. Box 277 Rogers, AR 72757 Tel: 479-659-7800 11. Norton Power Systems Services $1,600 1203-A Eaglecrest Nixa, MO 65714 Jeff A. Norton Tel: 417-724-9420 12. Philistin & Heller Vendor $2,136 Group Inc 28306 N. 44th Place Cave Creek, AZ 85331 Tel: 888-959-4048 Email: sales@thginc.net 13. Premier Grounds Services $3,855 Management LLC P.O. Box 23547 Barling, AR 72923 Tel: 479-561-6206 Email: premiergroundsma nagement3@gmail.com 14. PRN Medical Services Services $34,376 4500 Rogers Avenue Fort Smith, AR 72903 Tel: 479-785-9222 15. Roto-Rooter/Dillard Services $1,115 Northwest Inc P.O. Box 7180 Springdale, AR 72766 Tel: 479-751-8442 16. ShiftKey LLC Services $53,594 P.O. Box 735913 Dallas, TX 75373 Tel: 888-426-1424 Email: a.smith@shiftkey.com 17. Springfield Janitor Vendor $4,097 Supply Inc 2255 N. Burton Avenue Springfield, MO 65803 Tel: 479-659-0299 Email: admin@springfieldjanitorsupply.com 18. Sysco- Arkansas Vendor $16,976 5800 Frozen Road Little Rock, AR 72200 Tel: 770-313-9642 19. Washington County Personal and Real $57,501 Tax Collector Property Taxes 280 N. College Ave, Ste 202 Fayetteville, AR 72701 Tel: 479-444-1526 Email: collectorhelp@was hingtoncountyar.gov 20. Washington County Personal Property $4,085 Tax Collector Taxes 280 N. College Ave, Ste 202 Fayetteville, AR 72701 Tel: 479-444-1526 Email: collectorhelp@was hingtoncountyar.gov BED BATH: Moody's Lowers PDR to D-PD Following Bankruptcy Filing ---------------------------------------------------------------- Moody's Investors Service downgraded Bed Bath & Beyond Inc. probability of default rating to D-PD from Ca-PD. Moody's affirmed the company's other ratings, including the Ca corporate family rating, and its C senior unsecured global notes rating. Its SGL-3 speculative grade liquidity rating (SGL) remains unchanged. The outlook remains stable. These actions reflect governance considerations reflected by the company's announcement [1] that it has filed for protection under Chapter 11 of the US Bankruptcy Code. The filing follows a period in which Bed Bath has been struggling to stabilize its operations with fourth quarter fiscal 2022 sales declining in the 40-50% range and the continuation of significant operating losses. Affirmations: Issuer: Bed Bath & Beyond Inc. Corporate Family Rating, Affirmed Ca Senior Unsecured Regular Bond/Debenture, Affirmed C Downgrades: Issuer: Bed Bath & Beyond Inc. Probability of Default Rating, Downgraded to D-PD from Ca-PD Outlook Actions: Issuer: Bed Bath & Beyond Inc. Outlook, Remains Stable RATINGS RATIONALE Bed Bath and its subsidiaries commenced voluntary Chapter 11 proceedings in the US Bankruptcy Court for the District of New Jersey. The company has received commitments of up to $240 of debtor-in-possession (DIP) financing comprised of a $40 million new money single draw term loan facility and the $200 million of certain secured obligations of its FILO term loan holders. The company, which has struggled to improve its operations despite additional sources of capital, has begun liquidation of its stores, and subject to court approval, will simultaneously conduct a sale and marketing process for its assets. The Company's 360 Bed Bath & Beyond and 120 buybuy BABY stores and websites will remain operating during this process. Subsequent to the actions, Moody's will withdraw all of its ratings for Bed Bath & Beyond Inc. given the company's bankruptcy filing. Headquartered in Union, NJ, Bed Bath & Beyond Inc. is a omni-channel retailer selling a wide assortment of domestics merchandise and home furnishings which operates under the names Bed Bath & Beyond and buybuy BABY. LTM revenue for the period ending November 26, 2022 was approximately $6.2 billion. The principal methodology used in these ratings was Retail published in November 2021. BLOCKFI INC: Gets More Time to Explore Possible Restructuring, Sale ------------------------------------------------------------------- Jonathan Randles of Bloomberg Law reports that BlockFi Inc. won a few more weeks to finalize a plan to get out of Chapter 11 bankruptcy, overcoming disgruntled customers who say they should be repaid more quickly. The cryptocurrency lender is exploring a potential sale of company assets or the possibility of getting an outside backer to support a restructuring deal, BlockFi lawyer Joshua Sussberg said in a hearing Wednesday. The company intends to file a bankruptcy-exit plan by May 15, 2023, Mr. Sussberg said. About BlockFi Inc. BlockFi is building a bridge between digital assets and traditional financial and wealth management products to advance the overall digital asset ecosystem for individual and institutional investors. BlockFi was founded in 2017 by Zac Prince and Flori Marquez and in its early days had backing from influential Wall Street investors like Mike Novogratz and, later on, Valar Ventures, a Peter Thiel-backed venture fund as well as Winklevoss Capital, among others. BlockFi made waves in 2019 when it began providing interest-bearing accounts with returns paid in Bitcoin and Ether, with its program attracting millions of dollars in deposits right away. BlockFi grew during the pandemic years and had offices in New York, New Jersey, Singapore, Poland and Argentina. BlockFi worked with FTX US after it took an $80 million hit from the bad debt of crypto hedge fund Three Arrows Capital, which imploded after the TerraUSD stablecoin wipeout in May 2022. BlockFi had significant exposure to the companies founded by former FTX Chief Executive Officer Sam Bankman-Fried. BlockFi received a $400 million credit line from FTX US in an agreement that also gave FTX the option to acquire BlockFi through a bailout orchestrated by Bankman-Fried over the summer. BlockFi also had collateralized loans to Alameda Research, the trading firm co-founded by Bankman-Fried. BlockFi is the latest crypto firm to seek bankruptcy amid a prolonged slump in digital asset prices. Lenders Celsius Network LLC and Voyager Digital Holdings Inc. also filed for court protection this year. Kirkland & Ellis is also advising Celsius and Voyager in their separate Chapter 11 cases. BlockFi Inc. and eight affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Lead Case No. 22-19361) on Nov. 28, 2022. In the petitions signed by their chief executive officer, Zachary Prince, the Debtors reported $1 billion to $10 billion in both assets and liabilities. Judge Michael B. Kaplan oversees the cases. The Debtors taped Kirkland & Ellis and Haynes and Boone, LLP as general bankruptcy counsels; Walkers (Bermuda) Limited as special Bermuda counsel; Cole Schotz, P.C., as local counsel; Berkeley Research Group, LLC as financial advisor; Moelis & Company as investment banker; and Street Advisory Group, LLC as strategic and communications advisor. Kroll Restructuring Administration, LLC is the notice and claims agent. BLUE LIGHTNING: Court OKs Interim Cash Collateral Access -------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas, Fort Worth Division, authorized Blue Lightning Transportation Solutions, Inc., Truckers Pipeline, Inc., and Blue Lightning Holdings, Inc. to use cash collateral and obtain credit pursuant to a factoring agreement on an interim basis in accordance with the budget. The Debtors require the use of cash collateral and obtain credit to finance their operations, maintain business relationships with its vendors, suppliers and customers, and to pay their employees. RTS Financial Service, Inc., the Debtors' proposed post-petition factor, is willing to purchase the Debtors' Accounts post-petition and make advances and extend financing to the Debtors only upon the conditions contained in the Factoring Agreement. The Debtors have gross monthly revenue of approximately $610,000. Due to an aging fleet, the Debtors have been unable to keep all their rolling stock in service, and the Debtors' secured lender, Centerstone SBA Lending, Inc., has been unwilling to permit the Debtors to sell vehicles and reinvest the proceeds in new rolling stock inventory. The Debtors' primary indebtedness consists of secured claims -- inclusive of undersecured claims -- in the approximate amount of $5.1 million, and unsecured claims in the amount of approximately $1.0 million. The Debtors' monthly cash needs are approximately $595,000. Before the Petition Date, on June 2, 2017, the Debtors entered into a factoring and security agreement with Third Coast Commercial Capital, Inc. Before the Petition Date, the Debtors routinely sold their accounts receivable from a portion of their trucking services to Third Coast. Third Coast is unwilling to continue the factoring arrangement post-petition. Accordingly, the Debtor has negotiated a post-petition factoring agreement with RTS Financial Service, Inc. Under the Factoring Agreement, the purchase price for the Debtors' post-petition receivables sold to RTS is the face amount of the invoices sold less a fee of 1.75% percent, subject to increases in the prevailing prime rate. If the prime rate remains unchanged, RTS will advance 98.25% of the face amount of the invoices. The Factoring Agreement requires that the Debtors repurchase certain receivables those invoices are not paid within a certain time or are later disputed -- both of which are very rare. The Debtors have not yet identified any other parties which appear to hold a security interest in the Debtors' post-petition cash collateral within the meaning of 11 U.S.C. section 363(a). The Debtors' pre-existing senior secured lenders include Centerstone, the United States Small Business Association and potentially Global Merchants Cash, Inc. in addition to Third Coast, but none of the Debtor's post-petition revenues constitute proceeds, products, offspring, or profits of the collateral of Third Coast, GM, the SBA, or Centerstone, and thus any lien of those parties on accounts created post-petition is cut off pursuant to 11 U.S.C. section 552. The Debtors are further authorized to sell to RTS, the Debtors' post-petition Accounts and RTS will have a first and priority interest in the Accounts over any creditor of the Debtors. These events constitute an "Event of Default" under the Factoring Agreement and the Interim Order: (i) The failure to timely make payments RTS as and when due; (ii) The failure of the Debtors to pay all of their administrative expenses in full in accordance with and subject to the terms as provided for in the Budget; (iii) The Interim Order becomes stayed, reversed, vacated, amended or otherwise modified in any respect without the prior written consent of RTS, except by the Final Order; (iv) The dismissal of the Chapter 11 cases, conversion of the Chapter 11 cases to Chapter 7 cases, or suspension of the Chapter 11 cases under section 305 of the Bankruptcy Code; (v) The appointment of a chapter 11 trustee or an examiner with enlarged powers (beyond those set forth in section 1104(c) and 1106(a)(3) and (4) of the Bankruptcy Code); (vi) The granting of relief from the automatic stay to permit foreclosure with respect to a material asset of the Debtors, by any entity other than RTS on any Collateral; (vii) The entry of an order granting any superpriority claim which is senior or pari passu with that of RTS pursuant to the Interim Order; (viii) The payment of or granting adequate protection with respect to prepetition indebtedness of the Debtors other than as set forth in the Budget or as provided for in the Interim Order; (ix) Any of the liens or claims or RTS granted pursuant to the Interim Order to be valid, perfected and enforceable in all respects; or (x) The payment of estate professional fees by the Debtors other than to the extent set forth in the Budget. A final hearing on the matter is set for May 3, 2023 at 11 a.m. A copy of the Court's order and the Debtor's budget is available at https://bit.ly/41NhZNo from PacerMonitor.com. The Debtor projects $242,915 in total expenses. About Blue Lightning Holdings, Inc. Blue Lightning Holdings, Inc. and its affiliates provide short and long haul trucking services throughout the continental United States. They operate approximately 32 trucks and trailers out of a home office located in Tarrant County, Texas. Blue Lightning Transportation Solutions, Inc., Truckers Pipeline, Inc., and Blue Lightning Holdings, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Tex. Lead Case No. 23-41064) on April 15, 2023. In the petition signed by Eran Blitzblau, president, the Debtor disclosed up to $50,000 in assets and up to $10 million in liabilities. The Hon. Mark X. Mullin oversees the case. Howard Marc Spector, Esq., at Spector and Cox PLLC, represents the Debtor as legal counsel. BRIGHT MOUNTAIN: Buys Insights and Agency Units From Big Village ---------------------------------------------------------------- Bright Mountain Media announced the acquisition of two critical business units of Big Village. Bright Mountain will add Big Village's Insights and Agency divisions to its portfolio. The Company acquired the Big Village assets for approximately $20 million, plus assumed liabilities, in an all-cash transaction funded by a senior secured credit facility. The assets are expected to add approximately $50 million of annualized revenue and be immediately accretive to 2023 Adjusted EBITDA through revenue and cost synergies. By combining Big Village's proprietary insights and award-winning creative and media divisions with Bright Mountain Media's existing premium publishing and ad technology, the Company expects to maximize value to clients, delivering a full spectrum of advertising, marketing, and media services under one roof. Commenting on the transaction Bright Mountain Media CEO Matt Drinkwater said, "Data and consumer insights are foundational to any marketers' success. Big Village's Insights division has built a strong reputation for marrying traditional research methodologies and behavioral data with modern analytics that get to the heart of the consumer. This acquisition provides true data-driven insights that align with our long-term growth strategy and underscores our commitment to delivering exceptional quality and value to our customers." "From understanding consumer behavior to crafting creative strategy, to implementing and optimizing media investments, we can now provide a holistic view of target audiences, ultimately powering our customers' creative and media strategies to deliver business results." Mr. Drinkwater continued: "We look forward to integrating the diverse talent and innovative thinking of both business units to drive growth, innovation, and success for our entire set of collective clients. We are confident that we will continue to set the standard for excellence in the marketing and media industry." The Big Village acquisitions round out a growing portfolio of Bright Mountain Media offerings, including a robust stack of programmatic technology and Wild Sky Media, a collection of high-profile owned and operated audience destinations offering global reach through engaging content and multicultural audiences. About Bright Mountain Based in Boca Raton, Fla., Bright Mountain Media, Inc. -- www.brightmountainmedia.com -- is engaged in operating a proprietary, end-to-end digital media and advertising services platform designed to connect brand advertisers with demographically-targeted consumers -- both large audiences and more granular segments -- across digital, social and connected television publishing formats. The Company defines "end-to-end" as its process for taking ad buying from beginning to end, delivering a complete functional solution, usually without requiring any involvement from a third party. Bright Mountain reported a net loss of $8.13 million for the year ended Dec. 31, 2022, compared to a net loss of $12 million for the year ended Dec. 31, 2021. For the three months ended Dec. 31, 2022, the Company reported a net loss of $2.32 million. As of Dec. 31, 2022, the Company had $29.20 million in total assets, $43.27 million in total liabilities, and a total stockholders' deficit of $14.07 million. East Brunswick, New Jersey-based WithumSmith+Brown, PC, the Company's auditor since 2021, issued a "going concern" qualification in its report dated March 28, 2023, citing that the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. BROOKFIELD CORP: Defaults on $161M Office Buildings Debt -------------------------------------------------------- John Gittelsohn of Bloomberg News reports that Brookfield Corp. funds have defaulted on a $161.4 million mortgage for a dozen office buildings, mostly around Washington, DC, as rising vacancies hit property values. The loan was transferred to a special servicer who is working with "the borrower to execute a pre-negotiation agreement and to determine the path forward," according to a filing on the commercial mortgage-backed security. Some landlords are defaulting on debt, as borrowing costs surge and the prospects of filling up office towers wane given the rise in remote and hybrid work. About Brookfield Corp. Brookfield Corp. engages in the management of public and private investment products and services for institutional and retail clients. BROOKLYN PARK: Seeks to Hire A. El Kady, CPA as Accountant ---------------------------------------------------------- Brooklyn Park Slope Fitness LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of New York to hire A. El Kady, CPA, PC as its accountant. El Kady will provide general accounting services, including the preparation of monthly operating reports and assistance with issues relating to the Debtor’s bankruptcy. The firm will be paid at these rates: CPA Rate $250 per hour Staff Accountant $150 per hour Admin/Travel Time $100 per hour El Kady is a "disinterested person," as such term is defined in section 101(14) of the Bankruptcy Code, as disclosed in the court filings. The firm can be reached through: Abdalla El Kady A. El Kady, CPA, PC 740 Jefferson Ave Kenilworth, NJ 07033 Phone: +1 908-445-7213 About Brooklyn Park Slope Fitness Brooklyn Park Slope Fitness, LLC operates the Retro Fitness of Brooklyn Park Slope in New York. Brooklyn Park Slope Fitness filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 23-41129) on March 31, 2023, with $438,845 in assets and $1,521,906 in liabilities. The petition was signed by Fidelia Perez as manager. Judge Elizabeth S. Stong presides over the case. The Debtor tapped Fred B. Ringel, Esq., at Leech Tishman Robinson Brog, PLLC as bankruptcy counsel; the Law Office of Joseph J. Schwartz, P.C. as special litigation counsel; and El Kady, CPA, PC as accountant. BROOKLYN PARK: Taps Joseph J. Schwartz as Litigation Counsel ------------------------------------------------------------ Brooklyn Park Slope Fitness, LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of New York to hire the Law Office of Joseph J. Schwartz, P.C. as its special litigation counsel. The firm will represent the Debtor in the adversary proceeding styled as Brooklyn Park Slope Fitness LLC et al. v. Manischevitz Family LLC et al. The case is pending in the Supreme Court of the State of New York, Kings County. The firm will charge $350 per hour for attorneys and $120 per hour for paraprofessionals. In addition, the firm will seek reimbursement for work-related expenses incurred. The firm received a retainer in the amount of $5,000. As disclosed in court filings, the Law Office of Joseph J. Schwartz is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Joseph J. Schwartz, Esq. Law Office of Joseph J. Schwartz, P.C. 3118 Quentin Rd Brooklyn, NY 11234-4249 Phone: (347) 566-4623 About Brooklyn Park Slope Fitness Brooklyn Park Slope Fitness, LLC operates the Retro Fitness of Brooklyn Park Slope in New York. Brooklyn Park Slope Fitness filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 23-41129) on March 31, 2023, with $438,845 in assets and $1,521,906 in liabilities. The petition was signed by Fidelia Perez as manager. Judge Elizabeth S. Stong presides over the case. The Debtor tapped Fred B. Ringel, Esq., at Leech Tishman Robinson Brog, PLLC as bankruptcy counsel; the Law Office of Joseph J. Schwartz, P.C. as special litigation counsel; and El Kady, CPA, PC as accountant. BROWN BIDCO: S&P Affirms 'B+' ICR, Outlook Stable ------------------------------------------------- S&P Global Ratings affirmed all of its ratings on Orlando, Fla.-based aviation services provider Brown Bidco Ltd. (doing business as Signature Aviation), including its 'B+' issuer credit rating. The stable outlook reflects its expectation that net leverage will remain in the 6.5x-7x range over the next 12 months as Signature's significant interest rate hedges and flexible cost structure offset slowing growth in demand for private aviation services. S&P said, "The rating affirmation and outlook reflect our expectation Signature's credit metrics will remain commensurate with the 'B+' rating even if EBITDA growth slows. Following the proposed debt-funded dividend transaction, we expect Signature will maintain sufficient cushion below our 7.5x downside leverage threshold for the rating. S&P Global Ratings-adjusted net leverage will rise to 6.9x from about 5.9x at year-end 2022. Although we forecast material deceleration in revenue and earnings growth in 2023 and 2024 due to cooling growth in demand for private flight services in a slowing U.S. economy, leverage could decline modestly toward the mid-6x area through cash flow generation absent material shareholder returns and acquisitions. However, we believe the company is more likely to continue its acquisition- and shareholder return-focused financial policy, keeping leverage at the higher end of our rating threshold." Since their respective leveraged buyouts in 2021, Signature and its largest competitor, KKR Apple Bidco LLC (doing business as Atlantic Aviation), have accelerated their debt-financed industry consolidation acquisition rollup strategies to increase market share and realize scale benefits related to fuel and insurance purchases and pilot pricing incentives. Both Signature and Atlantic now operate over 100 North American sites. As a result, few scaled competitors remain, and acquisition targets are limited to smaller networks. S&P said, "Therefore we believe Signature's financial policy focus is likely to shift toward dividend distributions as shareholders look to recoup their significant equity investment of over $4 billion. Periodic debt-funded acquisitions of smaller targets are also likely. Our ratings on both Signature and Atlantic reflect the long-term holding periods typical of ownership by an infrastructure fund rather than a private equity financial sponsor." Signature's significant real-estate hangar capital investments can carry a payback period of over 10 years, supporting the long-term alignment between Signature and its ownership. The stable outlook reflects S&P's expectation that net leverage will remain in the 6.5x-7x range over the next 12 months as Signature's significant interest rate hedges and flexible cost structure offset slowing growth in demand for private aviation services. S&P could lower the rating if Signature underperformed our forecast, resulting in weaker FOCF than it expected, combined with increasing leverage. In particular, S&P could lower the rating if it expected: -- Adjusted leverage would rise and remain sustainably above 7.5x; -- Negligible FOCF after lease payments; or -- The company's financial policy proves more aggressive than expected, including additional large debt-funded returns to shareholders. Although unlikely over the next 12 months, S&P could consider an upgrade if it believed adjusted debt to EBITDA would fall and remain below 5.5x. An upgrade is contingent on the owners' commitment to maintain a financial policy that would support such improved ratios on a sustained basis. ESG credit indicators: E2, S2, G2; CALAMP CORP: Board Adopts Amended Bylaws ---------------------------------------- The Board of Directors of CalAmp Corp. approved and adopted an amendment and restatement of the Company's Bylaws. The amendments address the universal proxy rules adopted by the U.S. Securities and Exchange Commission by clarifying that no person may solicit proxies in support of a director nominee other than the Board's nominees, unless such person has complied with Rule 14a-19 under the Securities Exchange Act of 1934, as amended, including applicable notice and solicitation requirements. Further, any stockholder directly or indirectly soliciting proxies from other stockholders must use a proxy card color other than white, with the white proxy card being reserved for exclusive use by the Board. The amendments also revise the advance notice disclosure requirements contained in the Bylaws to require the stockholder (i) proposing business or nominating directors or (ii) demanding a record date to request a special meeting, to provide additional information about the stockholder's ownership of securities in the Company and relationships and interests in material agreements with or involving the Company, as well as material litigation, and permit the Board to request that such stockholder, or such proposed candidate for nomination as a director, if applicable, furnish additional information that is reasonably requested by the Board. Further, the Bylaws prohibit a stockholder from nominating a greater number of director candidates than are subject to election by stockholders at the applicable meeting. Additionally, the Bylaws require candidates for the Board, whether nominated by a stockholder or the Board, to provide additional background information and representations regarding such candidate's intent to serve the entire term, voting or compensation arrangements, compliance with the Company's policies and guidelines, and intention to deliver an irrevocable resignation, as well as such candidate's written consent to being named in a proxy statement and accompanying proxy card relating to the Company's next meeting of stockholders at which directors are to be elected. The Bylaws also require a candidate for nomination as a director to update and supplement all required information as necessary, so that the information shall be true and correct. The Bylaws also require updates and supplements for all required information as necessary, so that the information shall be true and correct as of the record date for stockholders entitled to vote at the meeting and as of the date that is 10 business days prior to the meeting or any adjournment or postponement thereof. In addition, the amendments provide procedural requirements regarding special meetings and action by written consent, including that a stockholder may make a demand to call a special meeting or act by written consent only after first submitting a request that the Board fix a record date for the purpose of determining the stockholders entitled to, as appropriate, (i) demand that the Secretary of the Company call a special meeting or (ii) take such action by written consent. The amendments also include certain technical, conforming, modernizing or clarifying changes to the Bylaws. About CalAmp CalAmp Corp. provides flexible solutions to help organizations worldwide monitor, track and protect their vital assets. The Company's unique combination of software, devices, and platform enables over 14,000 commercial and government organizations worldwide to increase efficiency, safety and transparency while accommodating the unique ways they do business. For the nine months ended Nov. 30, 2022, the Company reported a net loss of $24.40 million. Calamp reported a net loss of $27.99 million for the year ended Feb. 28, 2022, a net loss of $56.31 million for the year ended Feb. 28, 2021, and a net loss of $79.30 million for the year ended Feb. 29, 2020. As of Aug. 31, 2022, the Company had $371.04 million in total assets, $349.22 million in total liabilities, and $21.82 million in total stockholders' equity. * * * Egan-Jones Ratings Company, on December 23, 2022, maintained its 'CCC' foreign currency and local currency senior unsecured ratings on debt issued by CalAmp Corp. EJR also maintained its 'C' rating on commercial paper issued by the Company. CARVANA CO.: Prepares $479 Million Bond for Sale ------------------------------------------------ Scott Carpenter of Bloomberg Law reports that Carvana Co. is preparing to sell $479 million in bonds backed by subprime auto loans, its first offering of asset-backed bonds that aren't from prime borrowers in over a year. The online used car dealer has begun marketing the bonds to potential investors and plans to finalize the sale early next week, according to preliminary deal information provided by a person with knowledge of the matter. BNP Paribas SA is the lead underwriter on the debt offering, which is also being run by Deutsche Bank AG and Wells Fargo & Co. About Carvana Co. Founded in 2012 and based in Tempe, Arizona, Carvana Co. -- http://www.carvana.com-- is an e-commerce platform for buying and selling used cars. Carvana Co. reported a net loss of $2.89 billion for the year ended Dec. 31, 2022, compared to a net loss of $287 million for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $8.70 billion in total assets, $9.75 billion in total liabilities, and a total stockholders' deficit of $1.05 billion. * * * As reported by the TCR on Nov. 14, 2022, S&P Global Ratings revised its outlook on Carvana Co. to negative from stable and affirmed its 'CCC+' issuer credit rating. S&P said, "The negative outlook reflects Carvana's weak operating performance and continuing macroeconomic headwinds which could extend weaker profitability and sustain or increase negative cashflows." Moody's Investors Service changed Carvana Co.'s outlook to negative from stable and at the same time affirmed Carvana's Caa1 corporate family rating. Moody's said, "The change in outlook to negative from stable reflects Carvana's persistent lack of profitability and negative free cash flow generation that has consistently fallen short of Moody's expectations," as reported by the TCR on Nov. 25, 2022. CBC RESTAURANT: Seeks to Hire Hilco as Financial Advisor -------------------------------------------------------- CBC Restaurant Corp. and its affiliates seek approval from the U.S. Bankruptcy Court for the District of Delaware to employ Hilco Corporate Advisors, LLC as their financial advisor and investment banker. The firm's services include: Investment Banking Services: a) familiarizing itself to the extent that HCF deems appropriate with the commercial, financial, operational, and legal circumstances of Corner Bakery; b) identifying and recommending to Corner Bakery potential buyers and capital sources in connection with a Transaction; c) with Corner Bakery's assistance, creating written materials (e.g., a "teaser," confidential information memorandum, management presentation, and form of non-disclosure agreement) to be used in presenting the Transaction opportunity to prospective buyers and capital sources; d) soliciting and reviewing proposals and making recommendations and advising Corner Bakery in negotiating proposals concerning a Transaction; e) assisting Corner Bakery in responding to the due diligence review of potential buyers, including by managing a Virtual Data Room (VDR), and assisting Corner Bakery in organizing, populating, and maintaining the VDR; f) assisting Corner Bakery and its other professional advisors in recommending and negotiating bidding procedures, a sale timeline, and auction guidelines; g) assisting Corner Bakery in soliciting and evaluating acquisition proposals, including during an auction held pursuant to the bidding procedures; h) assisting Corner Bakery and its other professional advisors in negotiating definitive documentation concerning a Transaction and otherwise assisting in the process of closing a Transaction; and i) as necessary, providing testimony and other litigation support services to assist Corner Bakery in obtaining court approval of the bidding procedures, motion to approve a sale, and other matters related to the sale process and Transaction. Financial Advisory Services: a) assisting with the preparation of financial projections; b) assisting with the preparation of a Debtor-in-Possession budget and assisting with the negotiation of a DIP loan; c) assisting in the development and confirmation of a plan of reorganization under Chapter 11 of the Bankruptcy Code , if necessary; d) providing valuation services in connection with the Plan, if necessary; e) assisting with the preparation of Bankruptcy Court motions as requested by counsel; f) assisting as requested with compliance with the reporting requirements of the Bankruptcy Code, Federal Rules of Bankruptcy Procedure, and the Local Rules for the United States Bankruptcy Court for the District of Delaware, including reports, monthly operating statements, and schedules; g) consulting with all other retained parties; SSCP Restaurant Investors LLC, the Company's secured lender (the "Senior Secured Lender"); the Official Committee of Unsecured Creditors; and other parties-in-interest; h) participating in hearings before the Bankruptcy Court and, if necessary, providing testimony in connection with such hearings; i) performing such other tasks as appropriate and as may reasonably be requested by Corner Bakery's management or Corner Bakery's counsel; j) to the extent necessary or appropriate, becoming familiar with Corner Bakery's financial condition and business; k) advising and assisting Corner Bakery in examining, analyzing, developing, structuring and negotiating the financial aspects of any potential or proposed strategy for a Transaction; l) assisting Corner Bakery in soliciting, coordinating and evaluating indications of interest and proposals, tenders and consents in connection with any Transaction; m) providing expert advice and testimony regarding financial matters related to any Transaction(s), if necessary, and if requested by Corner Bakery, participating in hearings before the Court and providing relevant testimony (including expert testimony) with respect to HCF’s services and the matters described in the Engagement Letter, as well as issues arising in connection with any proposed Plan in HCF’s area of expertise concerning a Transaction; n) attending meetings of and advising and otherwise communicating with the Corner Bakery's Board of Directors (or committees or subcommittees thereof), creditor groups, and other interested parties, as HCF and Corner Bakery determine to be necessary or desirable; and o) providing such other financial advisory services as may be agreed in writing between HCF and Corner Bakery. The firm will be compensated as follows: a) Corner Bakery shall pay a monthly fee ("Monthly Fee") of $35,000 for the services provided in connection with this engagement, with the first Monthly Fee due and payable upon execution of this Agreement and any subsequent Monthly Fee due and payable on the monthly anniversary date of this Agreement; and b) Corner Bakery shall pay HCF a fee ("Transaction Fee") upon the closing date with respect to, and as a condition to the closing of, the Transaction, which Transaction Fee shall be paid directly out of the gross proceeds of the Transaction, in an amount equal to: (a) $1,000,000; plus (b) 2.0 percent of the Transaction Value in excess of the allowed amount of any secured claim held by the Senior Secured Lender and junior Debtor-in-Possession financing lender. During the 90-day period before the Petition Date, Corner Bakery paid one monthly fee to Hilco in the amount of $35,000. Teri Stratton, managing director at Hilco, 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: Teri Stratton Hilco Corporate Finance, LLC 5 Revere Drive, Suite 206 Northbrook, IL 60062 Tel: (847) 504-2462 Fax: (847) 897-0874 Email: tstratton@hilcoglobal.com About CBC Restaurant CBC Restaurant Corp. and its affiliates operate and franchise quick-casual eateries under the name Corner Bakery Cafe. The Debtors sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10245) on Feb. 22, 2023. In the petition signed by its chief executive officer and chief operating officer, Jignesh Pandya, CBC Restaurant disclosed $10 million to $50 million in both assets and liabilities. Judge Karen B. Owens oversees the cases. The Debtors tapped Mette H. Kurth, Esq., at Culhane Meadows PLLC as legal counsel and Hilco Trading LLC d/b/a Hilco Global as financial advisor and investment banker. Kurtzman Carson Consultants, LLC is the Debtors' administrative advisor and claims agent. On March 20, 2023, Andrew Vara, Acting U.S. Trustee for Regions 3 and 9, appointed an official committee of unsecured creditors in these Chapter 11 cases. The committee appointed Tucker Ellis, LLP as lead bankruptcy counsel; Potter Anderson & Corroon, LLP as local counsel; and Berkeley Research Group, LLC as financial advisor. CELSIUS NETWORK: Faces DOJ Opposition to Executive Bonus Plan ------------------------------------------------------------- Evan Ochsner of Bloomberg Law reports that the Department of Justice's bankruptcy watchdog objected to Celsius Network LLC's proposed plan to pay executives up to $2.8 million in bonuses, saying it's too expensive and company benchmarks for earning the money are too easy. Celsius has portrayed the bonus plan as a necessary incentive for top-tier executives, but the tasks it asks them to complete are "merely layups," the US Trustee said in an objection filed Friday, April 14, 2023, in the US Bankruptcy Court for the Southern District of New York. 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. CELSIUS NETWORK: UCC Gets Nod to File Fraud Claims vs. Lender ------------------------------------------------------------- Amelia Pollard of Bloomberg Law reports that the official committee of Celsius Network creditors won court approval to assert claims including fraud and negligent misrepresentation against the failed crypto lender on behalf of its account holders. US Bankruptcy Judge Martin Glenn signed off on the creditor committee's request in a hearing Tuesday, April 18, 2023. The group sought the approval in order to streamline the claims process, rather than relying on individual account holders to assert demands for damages against a specific unit of the lender called Celsius Network Ltd. Allegations of fraud and misrepresentation have plagued the crypto firm since it filed for bankruptcy in July 2022. 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. CENPORTS COMMERCE: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Cenports Commerce Inc. 1742 Sabre Street Hayward, CA 94545 Business Description: Cenports Commerce is a B2B drop shopping (virtual distribution) company that helps brands sell products online to HomeDepot, Lowes, etc under their own account. The Company has no inventory and uses internal tools to help retailers. Chapter 11 Petition Date: April 25, 2023 Court: United States Bankruptcy Court Northern District of California Case No.: 23-40478 Debtor's Counsel: Michael Jay Berger, Esq. LAW OFFICES OF MICHAEL JAY BERGER 9454 Wilshire Boulevard, 6th Floor Beverly Hills, CA 90212 Tel: (310) 271-6223 Fax: (310) 271-9805 Email: michael.berger@bankruptcypower.com Total Assets as of April 20, 2023: $212,973 Total Debts as of April 20, 2023: $7,391,240 The petition was signed by Derrick Chen as CEO of Censports Commerce Holding Inc., Debtor's shareholder. 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/3ZJYTSI/Cenports_Commerce_Inc__canbke-23-40478__0001.0.pdf?mcid=tGE4TAMA CINEWORLD GROUP: Class 5A Unsecureds Will Get 0.3% to 0.5% in Plan ------------------------------------------------------------------ Cineworld Group PLC and its Debtor Affiliates submitted a Second Amended Disclosure Statement relating to the Second Amended Joint Chapter 11 Plan of Reorganization dated April 24, 2023. The Debtors are reorganizing under chapter 11 of the Bankruptcy Code. As a result, the occurrence of the Effective Date means that the Debtors will continue to operate their business as a going concern. Class 5A consists of General Unsecured Claims Against the Class 5A Debtors. In full and final satisfaction of its Allowed General Unsecured Claims in Class 5A, on the Effective Date, each Holder of an Allowed General Unsecured Claim in Class 5A shall receive its applicable share of the GUC Recovery Pool. The allowed unsecured claims total $1.41 billion to $1.45 billion. This Class will receive a distribution of 0.3% to 0.5% of their allowed claims. Class 5B consists of General Unsecured Claims Against the Class 5B Debtors. In full and final satisfaction of its Allowed General Unsecured Claims in Class 5B, on the Effective Date, each Holder of an Allowed General Unsecured Claim in Class 5B shall receive its Pro Rata share of 60% of the GUC Recovery Pool. The allowed unsecured claims total $224.4 million to $916.4 million. This Class will receive a distribution of 0.7% to 4.8% of their allowed claims. The interests in Cineworld Parent shall be extinguished or otherwise rendered of no force and effect pursuant to the implementation of one or more Implementation Mechanism(s) in England and Wales, and Holders of Interests in Cineworld Parent will not receive any distribution on account of such Interests in Cineworld Parent. The Debtors and the Reorganized Debtors, as applicable, shall fund distributions under the Plan with (1) proceeds from the Exit First Lien Facility, (2) proceeds from the Direct Equity Allocation and Rights Offering, (3) the New Common Stock, and (4) Cash on hand. Holders of Allowed General Unsecured Claims shall, in accordance with the allocation determined by the Creditors' Committee, receive their allocable share of (a) $10 million in Cash and (b) interests in the Litigation Trust representing a right to recovery of (i) the first $5 million of Cash recovered by the Litigation Trust from the Interchange Litigation Claims and (ii) 50% of any Cash recovered in excess of $5 million in connection with such claims. In addition, the Plan provides for the payment of the reasonable and documented expenses of BNY Mellon Corporate Trustee Services Limited, in its capacity as indenture trustee for the Convertible Bonds, in an amount not to exceed $700,000. Further, as part of the Committee Settlement, (a) the Holders of Legacy Facilities Claims will not receive any recovery on account of their deficiency claims and any adequate protection claims for diminution of value beyond what is set forth in Article III.F of this Disclosure Statement for "Class 4 Legacy Facilities Claims" and (b) all Avoidance Actions will be released and waived under the Plan. Co-Counsel to the Debtors: Matthew D. Cavenaugh, Esq. Rebecca Blake Chaikin, Esq. Veronica A. Polnick, Esq. Vienna Anay, Esq. Jackson Walker LLP 1401 McKinney Street, Suite 1900 Houston, TX 77010 Tel: (713) 752-4200 Fax: (713) 752-4221. Email: mcavenaugh@jw.com rchaikin@jw.com - and - Joshua A. Sussberg, Esq. Ciara Foster, Esq. Kirkland & Ellis LLP Kirkland & Ellis International LLP 601 Lexington Avenue New York, NY 10022 Tel: (212) 446-4800 Fax: (212) 446-4900 Email: jsussberg@kirkland.com 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. CINEWORLD GROUP: Ends Marketing for 'Rest of World' Business ------------------------------------------------------------ Foster Wong of Bloomberg News reports that Cineworld Group, in agreement with its key stakeholders, has decided to terminate the marketing process for its 'Rest of World' business outside of the US, the UK and Ireland, according to a statement. It received proposals for the Rest of World business from a number of prospective counterparties, however the proposals did not meet the value level required by the group's lenders. It continues to move forward with the proposed restructuring in the Chapter 11 cases. The company continues to expect to emerge from the Chapter 11 cases during the first half of 2023. During the restructuring process, Cineworld continues to operate its global business. About Cineworld Group PLC 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. CINEWORLD: Receives Competing $2.26-Bil. Exit Financing Offer ------------------------------------------------------------- Amelia Pollard of Bloomberg Law reports that some lenders to Cineworld Group PLC are putting together a competing bankruptcy exit financing package that they argue is superior to the theater chain's existing $2.26 billion proposal. A group of lenders that includes Avenue Capital Management, Jefferies Leveraged Credit Products LLC and Greywolf Capital Management unveiled their proposal in court filings and a bankruptcy hearing Thursday, April 20, 2023. The creditors argue Cineworld's current exit financing plan unfairly benefits a majority lender group they were blocked from joining. About Cineworld Group PLC 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. CNX RESOURCES: Fitch Affirms LongTerm IDR at 'BB+', Outlook Stable ------------------------------------------------------------------ Fitch Ratings has affirmed CNX Resources Corporation's (CNX) Long-Term (LT) Issuer Default Rating (IDR) at 'BB+'. The revolving credit facility was affirmed at 'BBB-'/'RR1' and the senior unsecured notes were affirmed at 'BB+'/'RR4'. The Rating Outlook is Stable. The rating reflects CNX's material generation of FCF and the expectation that this will continue over the forecast horizon, debt reduction efforts, robust hedging program, lack of near-term maturities, and material liquidity. Rating concerns include the risk of operating solely in the Appalachian Basin, where there are concerns with takeaway constraints and wide differentials, and concerns about the amount of high-quality inventory in the company's portfolio. CNX's hedging strategy is important as it provides greater certainty to future FCF generation. Fitch believes CNX's emphasis on further reducing debt, including the potential conversion of convertible debt to equity, will further enhance the credit. KEY RATING DRIVERS Material FCF Generation: CNX's ability to consistently generate positive FCF is supportive of the credit quality. The FCF is driven by the company's low operating cost structure, reduced finding and development costs, strong hedging program that locks in future revenues and modest production growth. In particular, CNX's strong hedging program increases certainty in projected cash flow despite the volatility of natural gas prices. Fitch anticipates continued positive FCF, which will be applied primarily to stock buybacks over the forecast horizon. Low-Cost Operator: CNX's low-cost position allows for profitability even in low price environments. CNX is one of the lowest-cost operators in the Appalachian Basin, driven by relatively lower firm transportation charges, midstream ownership and investment in water infrastructure. Transportation, gathering and compression costs are well-below most competitors, as CNX has kept production growth goals modest, which allowed the company not to compete for high-cost, long-term capacity. The cost position is also benefited by the company's strategy of using significant basis hedging as opposed to locking up significant transportation to move gas out of the basin. The company generated fully burdened cash costs (operating, SG&A, interest) of $1.23/mcf during 2022. Robust Hedging Program: Fitch views CNX's hedging strategy as a credit positive. CNX has one of the strongest hedging positions in the industry, with approximately 80% of expected 2023 gas production hedged at an average of $2.47 per thousand cubic feet (mcf) with all of that also basis hedged. For 2024, 70% of expected 2024 gas production is hedged at an average of $2.38/mcf with nearly 100% of that also basis hedged. CNX attempts to match the NYMEX and basis hedges for the next twelve months of production. The company maintains a material portion of hedges through 2026. Fitch believes CNX has a thoughtful hedging program that locks in expected returns and reduces volatility in cash flows, while extensive basis hedging protects from potential disruptions in the Appalachian Basin. CNX's hedge program combined with a low-cost structure allows for capital allocation flexibility for its future development program. Production Scale and Inventory: Fitch believes scale is important in that it can reduce operating and capital costs per unit and provides ability to enhance liquidity. CNX is significantly smaller in terms of production than other 'BB' rated issuers, such as Southwestern Energy Corporation and Chesapeake Energy. CNX's low-cost position and focus on in-basin sales of gas are offset by a robust basis hedging strategy, however, allows the company to avoid costly long-term transportation and gathering costs. Fitch estimates CNX's reserve to production ratio at 20 years. There have been questions as to the remaining amount of high-quality inventory, which could provide for some uncertainty on future cash flows. Fitch believes that the company's strong credit metrics provide for opportunities to address these uncertainties over time. Single Basin Risk: CNX's operations are primarily in Appalachia, which exposes the company to significant basis risk due to takeaway constraints, although differentials have improved as new pipeline capacity was installed. CNX resisted signing into long-term takeaway contracts to avoid entering into firm transportation commitments that could have resulted in expensive long-term obligations. Instead, the company used hedges to mitigate pricing risk. CNX was able to move production without entering into contracts that would make it inflexible to adjust production during periods of low natural gas prices as it had to meet takeaway commitments. This strategy could be risky if Appalachian takeaway becomes constrained, but thus far the avoidance of long-term transportation obligations has benefited CNX. DERIVATION SUMMARY CNX's 2022 production profile of 1.6 billion cubic feet equivalent per day (Bcfe/d) is below its Appalachian peers, including Antero (AR; BBB-/Stable; 3.2 Bcfe/d), Ascent Resources Utica Holdings (B/Positive; 2.1 Bcfe/d), Chesapeake Energy Corp. (CHK; BB+/Positive; 4 Bcfe/d), EQT (EQT; BBB-/Stable; 5.3Bcfe/d) and Southwestern Energy Company (SWN; BB/Stable; 4.7 Bcfe/d). Consolidated leverage of 1.7x is slightly worse than 'BB' category-rated peers, such as CHK (0.7x) and SWN (1.3x). Fitch-calculated unhedged cash netback margin as of year-end 2022 of 80% was the highest of its peers, including CHK (79%), EQT (78%) and Southwestern (78%) due to the company's material lower gathering and transportation costs. CNX hedges approximately 80% of expected 2023 production compared with Southwestern at roughly 84% and EQT at 65%. CNX also attempts to match its NYMEX hedge with basis hedges, which provides significantly more price protection than its peers. Fitch believes a strong hedge program is important given the volatility of natural gas prices. KEY ASSUMPTIONS Fitch's Key Assumptions Within the Rating Case for the Issuer - Floating rate debt using the three-month SOFR forward curve (4.5% for 2023, 3.5% for 2024, 2.7% for 2025 and 2.6% for 2026; - Henry Hub (HH) natural gas prices of $3.50/thousand cubic feet of gas (mcf) in 2023, $3.50/mcf in 2024, $3/mcf in 2025 and $2.75/mcf in 2026; - West Texas Intermediate (WTI) oil prices of $80/barrel (bbl) in 2023, $70/bbl in 2024, $60/bbl in 2025 and $50/bbl in 2026; - 3% decline in production in 2023, 10% growth in 2024, 6% growth in 2025 and 3% growth in 2026; - Capex between $425 million and $625 million throughout forecast period; - Share repurchases of $200 million in 2023, $350 million in 2024, $500 million in 2025 and $200 million in 2026. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Production scale approaching 2.5 bcfe/d and/or proved reserves approaching 20 tcfe. - Increase in diversification of upstream operations; - Mid-cycle EBITDA leverage approaching 1.5x; Factors that could, individually or collectively, lead to negative rating action/downgrade: - Inability to replace reserves or a material reduction in net production; - Mid-cycle EBITDA leverage above 2.5x; - Material reduction in FCF or reduced credit metrics from allocation of FCF to shareholder-friendly actions; - Deviation from stated financial policy, including material reduction in hedging; - Weakening of unit cost profile or capital returns. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity Position: CNX has $21 million of consolidated cash on hand and $1.13 billion of borrowing capacity on its revolver as of Dec. 31, 2022, after consideration for letters of credit. As of the end of 2022, the borrowing base and revolver commitments were $2.25 billion and $1.3 billion, respectively, and the maturity is October 2026. The RCF includes a springing maturity at any point after Jan. 30, 2026, if availability under the RCF minus the aggregate principal amount of any and all such outstanding Convertible Notes is less than 20% of the aggregate commitments under the RCF. There is also a maximum net leverage ratio of no greater than 3.5/1.0, which is based on net debt. CNX must also maintain a minimum current ratio of no less than 1.0/1.0. CNXM has its own RCF not guaranteed by CNX. The facility has $600 million in commitments and had $154 million of borrowings outstanding, leaving availability at $446 million after consideration for letters of credit, as of Dec. 31, 2022. Fitch considers CNX's maturity schedule manageable with the next major maturity being the senior unsecured convertible notes in 2026. Fitch believes there a good chance that these notes could be converted to equity before the maturity. Excluding the revolver, the next note maturity is not until 2027. Fitch believes near-term liquidity should be sufficient given the company's ability to generate material FCF, which benefits from a high degree of certainty through the company's hedge program and low-cost structure. ISSUER PROFILE CNX Resources Corporation (NYSE: CNX) is an independent oil and gas company focused on the exploration, development, production, gathering, processing and acquisition of natural gas properties primarily in the Appalachian Basin. The company focuses on unconventional shale formations, primarily in the Marcellus and Utica shales. 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 ----------- ------ -------- ----- CNX Resources Corporation LT IDR BB+ Affirmed BB+ senior secured LT BBB- Affirmed RR1 BBB- senior unsecured LT BB+ Affirmed RR4 BB+ CORNERSTONE ONSITE: $650,000 DIP Loan from Southern Spear OK'd -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, authorized Cornerstone Onsite, LLC to use cash collateral and obtain post-petition financing, on a final basis. The Debtor obtained senior secured post-petition financing on a superpriority basis from Southern Spear, Inc. consisting of a term loan facility in an aggregate principal amount of up to $650,000, inclusive of secured pre-petition loans made to the Debtor in the principal amount of $350,000, for the purpose of enabling its efforts to prepare for and file its bankruptcy case, including, but not limited to meeting its payroll obligations. As of petition date, Southern Spear is owed approximately $1.48 million under various pre-petition loans. Southern Spear asserts a lien on all of the Debtor's assets and cash collateral therefrom. Southern Spear's lien, according to the Debtor, is subject to the statutory liens of taxing authorities and the liens of Patterson Dental Supply and Citizen First Bank on specific pieces of dental equipment. As adequate protection of its interest in the Collateral, Southern Spear is granted, effective as of the Petition Date, valid and automatically perfected replacement liens upon all of the DIP Collateral Proceeds, in each case, junior to the Carve-Out, the DIP Liens, and any other liens that are senior to the DIP Liens. The DIP Lender is granted allowed superpriority administrative expense claims as provided for in 11 U.S.C. section 507(b) in the amount of the Adequate Protection Claim, which Prepetition Lien 507(b) Claims will have recourse to and be payable from all of the DIP Collateral. The Prepetition Lien 507(b) Claims will be subject and subordinate to the Carve-Out and the DIP Superpriority Claims. The Debtor's rights to use cash collateral and DIP Facility will immediately terminate on the earlier of: (a) the date that is 40 days after the Petition Date if this Final Order has not been entered prior to the expiration of such 40-day period, unless otherwise extended by the DIP Lender; (b) the substantial consummation -- as defined in section 1101(2) of the Bankruptcy Code and which for purposes thereof will be no later than the "effective date" thereof -- of a plan of reorganization filed in the Chapter 11 Case that is confirmed pursuant to an order entered by the Bankruptcy Court; (c) the acceleration of the DIP Loans and the termination of the DIP Commitments with respect to the DIP Facility in accordance with the DIP Note; (d) the consummation of a sale of all or substantially all of the assets of the Borrower pursuant to 11 U.S.C. section 363; (e) the conversion of the Chapter 11 Case to one under chapter 7 of the Bankruptcy Code; and (f) June 19, 2023. A copy of the Court's order and the Debtor's budget is available at https://bit.ly/43ZpRgC from PacerMonitor.com. The Debtor projects total deductions, on a weekly basis, as follows: $95,167 for the week ending April 30, 2023; $455,909 for the week ending May 7, 2023; $51,229 for the week ending May 14, 2023; $280,207 for the week ending May 21, 2023; and $213,696 for the week ending May 28, 2023. About Cornerstone Onsite, LLC Cornerstone Onsite, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-30949) on March 17, 2023. The petition was signed by John D. White, its chairman. The Debtor has approximately $1.8 million in assets and $4.6 million in debt. Cornerstone Onsite, LLC is a Dental Services Organization and operates or manages 13 dental offices and one mobile unit in four states including Texas, California, North Carolina and Utah. Cornerstone's central business office is at 7575 San Felipe Street, Suite 101 Houston, Texas 77063. Cornerstone does not own the dental practices it manages. Rather, the dental practices are owned by four separate dental entities (one for each state) and operate under management agreements with the Company. The owners of the Dental Entities are dentists and neither the Dental Entities nor the dentists have filed bankruptcy. Judge Jeffrey P. Norman oversees the case. John Akard Jr., Esq., at Coplen & Banks, PC, represents the Debtor as legal counsel. CRYPTO CO: Borrows Additional $55K From AJB Capital --------------------------------------------------- The Crypto Company disclosed in a Form 8-K filed with the Securities and Exchange Commission it entered into a Second Amendment to Promissory Note to amend certain terms of a Promissory Note originally issued by the Company on or about May 3, 2022 in favor of AJB Capital Investments, LLC. Pursuant to the Second Amendment, AJB loaned the Company an additional $55,000 (resulting in proceeds to the Company of $50,000 after giving effect to an original issue discount of ten percent), and, as a result the Amendment served to increase the face amount of the Note to $1,180,000 to give effect to the additional funds loaned to the Company. All transaction documents originally entered into by the parties in connection with the issuance of the Note were amended to cause the term "Principal" to mean the sum of $1,180,000. Except as amended by the Second Amendment, all of the original terms and conditions of the Note remain as set forth in the original transaction documents. About Crypto Company Malibu, Calif.-based The Crypto Company -- www.thecryptocompany.com -- is engaged in the business of providing consulting services and education for distributed ledger technologies, for the building of technological infrastructure, and enterprise blockchain technology solutions. Crypto Company reported a net loss of $5.66 million in 2022, a net loss of $785,630 in 2021, and a net loss of $2.82 million in 2020. As of Dec. 31, 2022, the Company had $1.56 million in total assets, $4.62 million in total liabilities, and a total stockholders' deficit of $3.06 million. Lakewood, CO-based BF Borgers CPA PC, the Company's auditor since 2019, issued a "going concern" qualification in its report dated April 14, 2023, citing that the Company has suffered recurring losses from operations that raises substantial doubt about its ability to continue as a going concern. CUENTAS INC: Inks Operating Agreement for Brooksville Development ----------------------------------------------------------------- Cuentas, Inc. signed an Operating Agreement for Brooksville Development Partners, LLC ("Company") entered into by Brooksville Development DE, LLC, ("Class A Member") a Delaware limited liability company and Cuentas Inc, a Florida corporation, as well as Brooksville FL Partners, LLC, a Florida limited liability company ("Class B Members"). Brooksville Development Partners, LLC is a Florida limited liability company with its principal place of business is at 19046 Bruce B Downs Blvd., #403, Tampa, FL 33647 or such other place or places as the Manager may hereafter determine, but that may not be outside the United States of America. The purpose of the Company shall be to (a) acquire approval for a Multifamily property site for the development and sale of a residential apartment community consisting of approximately 364 units that are fully entitled and permitted for construction; and (b) such other activities as are related to or incidental to the foregoing. The Company, acting by and through the Manager, shall have all powers necessary or advisable in connection with the foregoing, including, but not limited to, the power to (i) enter into agreements and execute documents and instruments, including leases, mortgages, evidences of indebtedness, construction, development, management, and other contracts; (ii) borrow money, and open and maintain bank accounts authorizing withdrawals on the signature of such one or more persons as the Manager may designate; (iii) sell or assign any or all assets of the Company; and (iv) execute such other documents and take such other actions as may be necessary or desirable from time to time to carry out any purpose authorized pursuant to this Section. All real and personal property owned by the Company shall be owned by the Company as an entity, and the Members nor Manager shall not have any ownership interest in such property. Except as otherwise provided in this Agreement, the Company shall hold all of its real and personal property in the name of the Company and not in the name of the Members. Contemporaneously with the execution of this Agreement, each Member has made an initial Capital Contribution. The amount of $2,000,000 of the Class B Member's (Cuentas, Inc.) Initial Capital Contribution shall be paid into title insurance escrow account upon execution of this Agreement and held in trust by the title agent "Title Agent" and shall be released from escrow by the Title Agent to fund the balance of the purchase price at the closing of the purchase fee simple title in the Vacant Land by the Company from Seller, free and clear of any liens, claims and encumbrances with the sole exception being the Republic Bank loan to fund the remaining purchase price. If the closing of the Vacant Land purchase does not occur within 60 days of the execution of this Agreement, Title Agent shall immediately return the entire Two Million Dollars to Class B Member, Cuentas, Inc. In addition to the Initial Capital Contributions of the Members, within 120 days after the closing on the purchase of the Vacant Land, Manager shall submit to the Members the construction budget for the Development of the Project, and and the related documents, including without limitation, the design documents, all necessary permits and approvals by the relevant governmental entities necessary for the Development, general contractor construction contract, the term sheet of the proposed construction loan, setting forth the timing and comprehensive budget for the commencement and completion of the Development of the Project, and the detailed as completed estimated fair market value of the Project assuming either holding the Project for rental value or sale of the Project. The Members shall either agree in writing to fund the additional Capital Contributions to the Company or elect to not go forward with the Development of the Project and sell the Vacant Land and distribute the proceeds under Article 5 of this Agreement. If the Members elect to proceed with the Development of the Project, the Additional Capital Contribution shall be funded between Class B Members according to their agreed contributions which when funded shall be added to the respective contributing Members Capital Account Balance by the Members. Subject to the limitations provided in this Agreement, the Manager shall have exclusive and complete authority and discretion to manage the operations and affairs of the Company and to make all decisions regarding the business of the Company. Any action taken by the Manager on behalf of the Company shall constitute the act of and serve to bind the Company. In dealing with the Manager acting on behalf of the Company, no Person shall be required to inquire into the authority of the Manager to bind the Company. Persons dealing with the Company are entitled to rely conclusively on the power and authority of the Manager as set forth in this Agreement. The agreement includes certain Actions that require the written approval of the Members holding at least 75% of the Percentage Membership Interest. The agreement includes clauses for the removal, resignation and election of managers & officers. The Company shall pay for all expenses incurred in connection with the operation of the Company's business. The Manager shall keep, or shall cause to be kept, full, accurate, complete and proper books and records of all of the operations of the Company. For United States federal and (to the extent permitted by law) state and local income tax purposes, the Company shall be disregarded as an entity separate from the Members. If required, the agreement includes clauses for the potential dissolution, liquidation or termination of the company. The agreement also includes clauses for Indemnification and Advancement of Expenses and Limits on Liability of Members. An Addendum signed on April 14, 2023 clarified that the Two Million Dollars to Close was deposited solely to fund a portion of the purchase price, and was not intended by the parties to serve as a deposit or additional deposit of any kind or nature under the Purchase and Sale Agreement (PSA), and is not subject to forfeiture as liquidated damages to Seller in the event Buyer fails to close under the PSA for whatever reason. About Cuentas Headquartered in Miami, Florida, Cuentas, Inc. -- http://www.cuentas.com-- currently focuses on the business of using proprietary fintech technology to provide e-banking and e-commerce services for delivering mobile banking, prepaid debit and digital content services to the unbanked, underbanked and underserved Latino, Hispanic and immigrant communities. The Company's proprietary software platform enables Cuentas to offer comprehensive financial services and robust functionality that is absent from other Mobile Apps through the use of its Prepaid Debit Mastercard/General-Purpose Reloadable cards. Cuentas reported a net loss attributable to the company of $14.53 million in 2022, a net loss attributable to the company of $10.73 million in 2021, a net loss attributable to the company of $8.10 million in 2020, a net loss attributable to the company of $1.32 million in 2019, and a net loss of $3.56 million in 2018. As of Dec. 31, 2022, the Company had $1.50 million in total assets, $2.22 million in total liabilities, and a total stockholders' deficit of $724,000. Tel-Aviv, Israel-based Yarel + Partners, Certified Public Accountants (Isr.), the Company's auditor since 2023, issued a "going concern" qualification in its report dated March 31, 2023, citing that the Company has incurred net losses since its inception, and has not yet generated sufficient revenues to support its operations. As of Dec. 31, 2022, there is an accumulated deficit of $52,750,000. These conditions, along with other matters, raise substantial doubt about the Company's ability to continue as a going concern. CUSTOM SPRAY: David Sousa Named Subchapter V Trustee ---------------------------------------------------- Tracy Hope Davis, U.S. Trustee for Region 17, appointed David Sousa as Subchapter V trustee for Custom Spray Systems, Inc. Mr. Sousa will be compensated at $415 per hour for his services as Subchapter V trustee, in addition to reimbursement for related expenses incurred. Mr. Sousa declared that he is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: David Sousa P.O. Box 3167 Visalia, CA 93278-3167 Phone: (559) 242-2065 Email: Dave@fresnotrustee.com About Custom Spray Custom Spray Systems, Inc. filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. E.D. Calif. Case No. 23-90166) on April 18, 2023, with $50,001 to $100,000 in assets and $100,001 to $500,000 in liabilities. David Sousa serves as Subchapter V trustee. Judge Ronald H. Sargis oversees the case. The Debtor is represented by David C. Johnston, Esq. DAVID'S BRIDAL: To Close All Stores in Chapter 11 Absent Buyer -------------------------------------------------------------- Soma Biswas of The Wall Street Journal reports that David's Bridal will close all stores in Chapter 11 unless buyer emerges. David's Bridal LLC filed for bankruptcy and said it would shut down all of its stores if it doesn't quickly find a buyer for the country's largest bridal retail business. The privately owned company was forced to file Chapter 11 in the midst of a process to find a buyer willing to continue to operate the bridal chain. If it can't find a buyer, it will begin a wind-down of its operations with the help of liquidation firm Gordon Brothers Retail Partners LLC, according to a filing by David's Bridal CEO James Marcum in the U.S. Bankruptcy Court in Trenton, N.J. Sunday's, April 16, 2023, bankruptcy filing marks the second in less than five years for David's Bridal, which supplies wedding gowns to one out of every four brides in the U.S., Mr. Marcum said. The Conshohocken, Pa.-based retailer sells its wedding apparel at 294 stores in the U.S., Canada, the U.K. and franchise stores. By the time David's Bridal filed for bankruptcy, its cash on hand had dwindled to $4.4 million, court papers show. The company has lined up loans totaling up to $85 million from existing lenders on its revolving credit lines, including Bank of America NA, to keep operations funded while the sale process continues. The lasting effects of the Covid-19 pandemic and changes in consumer behavior led to a deterioration in the company's financial condition, according to Mr. Marcum's filing. The national wedding rate fell to its lowest level in 121 years in 2020 and has remained lower than normal. It reached 1.9 million weddings in 2022, compared with 2.2 million annually in the years leading up to the pandemic, Mr. Marcum said, citing data the company derived from various sources and its own surveys. The growing popularity of nontraditional wedding attire also has hurt the gown business, his filing said. Store traffic has fallen, including a 22% decline of in-store appointments in the fourth quarter of 2022, court papers show. While the company shed more than $434 million in debt through its last bankruptcy, it exited from chapter 11 with a large store footprint. The last bankruptcy also eroded customer confidence, Mr. Marcum said. 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. 18-1 635) on Nov. 19, 2018. In January 2019, David's Bridal successfully emerged from Chapter 11 bankruptcy and completed its financial restructuring. 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. With 294 stores across the United States, Canada, and United Kingdom, 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. In the new Chapter 11 cases, the Debtors listed $100 million to $500 million in both estimated assets and liabilities. The petitions were signed by James Marcum as chief executive officer. 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 in the new Chapter 11 cases. The Debtors' financial advisor is Berkeley Research Group, LLC; investment banker is Houlihan Lokey Capital, Inc.; and the liquidation consultant is Gordon Brothers Retail Partners, LLC. Omni Agent Solutions is the claims agent. DEVILLE CORP: Has Deal on Cash Collateral Access ------------------------------------------------ Deville Corp. asks the U.S. Bankruptcy Court for the Middle District of Florida, Tampa Division, for authority to use cash collateral in accordance with its agreement with secured creditors, Savannah Capital, LLC, and the Ad Hoc Committee of Equity Security Holders of Savannah Capital, LLC. Among other things, the proposed form of third interim order will (a) continue the authorization to use cash collateral; (b) extend the maturity date of the FLA-Nash mortgage by agreement from May 1, 2023 through and including June 1, 2023; and (c) schedule a continued hearing on the cash collateral motion on May 18, 2023, in conjunction with other hearings in the case. The Debtor requires the use of cash collateral to fund its operating expenses and the costs of administering the Chapter 11 case in accordance with the proposed budget. As previously reported by the Troubled Company Reporter, the Debtor anticipates that creditors will assert approximately $2.85 million in various claims and obligations. That amount includes a $900,000 mortgage to FLA-Nash, LLC that matures in March 2023 and an additional obligation of $250,000 to FLA Nash. The amount includes obligations for ad valorem real property taxes of approximately $184,000 owed to the Davidson County Metropolitan Trustee. The amount includes an approximately $1.2 million note to Savannah Capital, LLC, a Georgia limited liability company and a debtor in a chapter 11 case pending before the Court at In re Savannah Capital, LLC, Case No.: 8:22-bk-0143 1-CPM, as well as one of two 50% shareholders of the Debtor. The Savannah Capital Note may have been transferred to a third party. The Debtor requests that the Court enter the third interim cash collateral order without the necessity of a hearing. Alternatively, the Debtor requests that the Court set a hearing to consider entry of the third interim order before May 1, 2023, the extended maturity date of the FLA-Nash mortgage under the Second Interim Cash Collateral Order. A copy of the Debtor's motion and budget is available at https://bit.ly/3LlvUVz from PacerMonitor.com. The Debtor projects total operating expenses, on a monthly basis, as follows: $12,624 for April 2023; and $12,624 for May 2023. About Deville Corp. Deville Corp. is a Single Asset Real Estate (as defined in 11 U.S.C. Sec. 101(51B)). Deville Corp. filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-04930) on Dec. 14, 2022. In the petition filed by Edgar L.T. Gay, as president and director, the Debtor reported assets between $10 million and $50 million and liabilities between $1 million and $10 million. The Debtor is represented by Daniel R. Fogarty, Esq. at Stichter, Riedel, Blain & Postler, P.A. DIAMOND ELITE: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Diamond Elite Community LLC 1771 N Agave St Casa Grande, AZ 85122 Business Description: The Debtor is a Single Asset Real Estate (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: April 25, 2023 Court: United States Bankruptcy Court District of Arizona Case No.: 23-02643 Debtor's Counsel: David B. Goldstein, Esq. HYMSON GOLDSTEIN PANTILIAT & LOHR PLLC 14500 N. Northsight Blvd. Suite 101 Scottsdale, AZ 85260 Tel: 480-991-9077 Email: bank@legalcounselors.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Yehoshia Rubin as sole member. The Debtor failed to include in the petition a 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/KNNNF4Q/DIAMOND_ELITE_COMMUNITY_LLC__azbke-23-02643__0001.0.pdf?mcid=tGE4TAMA DIAMOND SPORTS: Seeks Approval to Hire Porter Hedges as Co-Counsel ------------------------------------------------------------------ Diamond Sports Group, LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire Porter Hedges, LLP as co-counsel with Paul, Weiss, Rifkind, Wharton & Garrison, LLP. The firm's services include: a. providing legal advice and services regarding local rules, practices, and procedures; b. providing certain services in connection with the administration of the Debtors' Chapter 11 cases, including, without limitation, preparing agendas, hearing notices and hearing binders of documents and pleadings; c. reviewing and commenting on proposed drafts of pleadings to be filed with the court as bankruptcy co-counsel to the Debtors; d. providing legal advice with respect to the Debtors' rights and duties and the continued business operations; e. assisting, advising and representing the Debtors in analyzing their capital structure, investigating the extent and validity of liens, cash collateral stipulations or contested matters; f. assisting, advising and representing the Debtors in any cash collateral or post-petition financing transactions; g. assisting, advising and representing the Debtors in the preparation of sale and bid procedures to auction the Debtors' assets; h. assisting, advising and representing the Debtors in any manner relevant to preserving and protecting the Debtors' estates; i. preparing legal papers; j. appearing in court; k. at the request of the Debtors, appearing in court and at any meeting with the U.S. trustee and creditors; and l. other necessary legal services. The firm's 2023 standard hourly rates are as follows: Partners $500 to $1,000 Counsel $475 to $900 Associates and Staff Attorneys $395 to $775 Paraprofessionals $300 to $445 Porter Hedges received a retainer in the amount of $50,000. John Higgins, Esq., a partner at Porter Hedges, 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. In accordance with Appendix B-Guidelines for reviewing fee applications filed by attorneys in larger Chapter 11 cases, Mr. Higgins also disclosed that: -- Porter Hedges has not agreed to any variations from, or alternatives to, its standard or customary billing arrangements for this engagement; -- none of the professionals included in the engagement vary their rate based on the geographic location of the bankruptcy cases; and -- Porter Hedges was retained in January 2023 and there have been no post-petition changes in rates. Porter Hedges can be reached through: John F. Higgins, Esq. Porter Hedges, LLP 1000 Main St., 36th Floor Houston, TX 77002 Tel: 713-226-6648 Fax: 713-226-6248 Email: jhiggins@porterhedges.com 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. Judge Christopher M. Lopez oversees the cases. The Debtors tapped Paul, Weiss, Rifkind, Wharton & Garrison, LLP and Porter Hedges, LLP as bankruptcy counsels; Wilmer Cutler Pickering Hale and Dorr, LLP as special corporate and litigation counsel; AlixPartners, LLP as financial advisor; Moelis & Company, LLC and LionTree Advisors, LLC as investment bankers; Deloitte Tax, LLP as tax advisor; Deloitte Financial Advisory Services, LLP as accountant; and Deloitte Consulting, LLP as consultant. Kroll Restructuring Administration, LLC is the claims agent. 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 Akin Gump Strauss Hauer & Feld, LLP. DIAMOND SPORTS: Seeks to Hire Wilmer as Special Counsel ------------------------------------------------------- Diamond Sports Group, LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire Wilmer Cutler Pickering Hale and Dorr, LLP as their special corporate and litigation counsel. The firm's services include: a. advising the Debtors regarding certain historic operational matters and business relationships on which the firm has historically advised the Debtors; b. providing advice with respect to the Debtors' sports league arrangements, including negotiations and matters involving any adversity between the Debtors and Major League Baseball and its affiliates, including the Office of the Commissioner of Baseball and Major League Baseball Trust; c. providing advice and representing the Debtors with respect to certain current and potential litigation matters; and d. preparing legal papers. Wilmer's hourly rates are as follows: Andrew Goldman, Esq. $1,920 Benjamin Loveland, Esq. $1,470 Lauren Lifland, Esq. $1,310 Partners $1,180 to $2,275 Counsel $1,150 to $1,385 Associates & Attorneys $680 to $1,195 Paraprofessionals $570 to $800 The Debtors paid $1,000,000 to Wilmer as an initial retainer. Subsequently, the Debtors paid the firm additional retainers totaling $4,202,078 during the 90-day period immediately preceding the petition date. In accordance with Appendix B-Guidelines for reviewing fee applications filed by attorneys in larger Chapter 11 cases, Wilmer disclosed that: -- The firm has not agreed to any variations from, or alternatives to, its standard or customary billing arrangements for this engagement. -- None of the professionals included in the engagement vary their rate based on the geographic location of the bankruptcy cases. -- In the ordinary course, Wilmer adjusts its billing rates on an annual basis effective January 1 of each year. Wilmer's 2022 billing rates were $1,105 to $2,165 for partners, $1,095 to $1,315 for counsel, $645 to $1,135 for associates, and $540 to $760 for paraprofessionals. This year, WilmerHale's billing rates were increased to $1,180 to $2,275 for partners, $1,150 to $1,385 for counsel, $680 to $1,195 for associates, and $570 to $800 for paraprofessionals. -- The Debtors have approved the budget and staffing plan from the petition date through June 30, 2023. Andrew Goldman, Esq., a partner at Wilmer, disclosed in a court filing that his firm does not have any interest adverse to the interest of the Debtors' estates, creditors and equity security holders. Wilmer can be reached through: Andrew N. Goldman, Esq. Wilmer Cutler Pickering Hale and Dorr, LLP 7 World Trade Center 250 Greenwich Street New York, NY 10007 Tel: (212) 230-8800 Fax: (212) 230-8888 Email: andrew.goldman@wilmerhale.com 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. Judge Christopher M. Lopez oversees the cases. The Debtors tapped Paul, Weiss, Rifkind, Wharton & Garrison, LLP and Porter Hedges, LLP as bankruptcy counsels; Wilmer Cutler Pickering Hale and Dorr, LLP as special corporate and litigation counsel; AlixPartners, LLP as financial advisor; Moelis & Company, LLC and LionTree Advisors, LLC as investment bankers; Deloitte Tax, LLP as tax advisor; Deloitte Financial Advisory Services, LLP as accountant; and Deloitte Consulting, LLP as consultant. Kroll Restructuring Administration, LLC is the claims agent. 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 Akin Gump Strauss Hauer & Feld, LLP. DIAMOND SPORTS: Seeks to Tap Deloitte Tax LLP as Tax Advisor ------------------------------------------------------------ Diamond Sports Group, LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire Deloitte Tax, LLP. The Debtors require a tax advisor to: (a) assist with the Debtors' evaluation of tax considerations of the restructuring events; (b) advise the Debtors as they consult with their legal and financial advisors on the cash tax effects of restructuring, bankruptcy and the post restructuring tax profile (including transaction costs or plan of reorganization tax costs), and the cash tax effects of a Chapter 11 filing and emergence transaction (including obtaining an understanding of the Debtors' financial advisors' valuation model and disclosures to consider the tax assumptions); (c) to the extent applicable, advise the Debtors regarding the restructuring and bankruptcy emergence process from a tax perspective, including analyzing various structuring alternatives, the tax workplan, modification of debt, and intercompany debt; (d) advise the Debtors on the cancellation of debt income for tax purposes under the Internal Revenue Code (IRC) Section 108, including cancellation of debt income generated from a restructuring, bankruptcy emergence transaction or modification of debt; (e) advise the Debtors on post-restructuring tax attributes or post-bankruptcy tax attributes (tax basis in assets, tax basis in subsidiary stock and net operating loss (NOL) carryovers) available under the applicable tax regulations and the reduction of such attributes based on the Debtors' operating projections, including a technical analysis of the effects of Treasury Regulation Section 1.1502-28 and the interplay with IRC Sections 108 and 1017; (f) assist the Debtors with any needed determinations pertaining to historic or prospective IRC Section 382 ownership changes, ownership shifts, or potential limitation for pre-restructuring or post-restructuring events in connection with the Debtors' evaluation of their NOLs, their recovery, and any related protective orders or plans; (g) advise the Debtors on net built-in gain or net built-in loss position at the time of any "ownership change" (as defined under IRC Section 382), including limitations on use of tax losses generated from post-restructuring or post-bankruptcy asset or stock sales; (h) to the extent applicable, advise the Debtors on the effects of tax rules under IRC Sections 382(l)(5) and (l)(6) pertaining to the post-bankruptcy net operating loss carryovers and limitations on their utilization, and the Debtors' ability to qualify for IRC Section 382(l)(5); (i) to the extent applicable, assist the Debtors with U.S. federal income tax observations in connection with any NOL protective orders or plans (i.e. orders designed to help mitigate the risk of any further ownership changes) recommended or drafted by legal counsel or the Debtors' financial advisors; (j) assist the Debtors on the anticipated tax work plan for the implementation of any desired or recommended legal entity realignment or restructuring (mergers, liquidations, etc.) resulting from the restructuring events, including domestic affiliates; (k) advise the Debtors with their efforts to calculate tax basis in the stock or interests in each of the Debtors' subsidiaries or other entity interests and tax basis in assets by legal entity; (l) advise the Debtors as to the treatment of post-petition interest for federal and state income tax purposes, including the applicability of the interest limitations under IRC Section 163(j); (m) advise the Debtors as to the deductibility of interest for any financing anticipated in connection with the restructuring events, including application of temporary or permanent disallowance under Sections 163(j), 163(l), AHYDO, or other provisions of federal income tax law; (n) advise the Debtors as to the state and federal income tax treatment of pre-bankruptcy and post-petition reorganization costs, including restructuring related professional fees and other costs, the categorization and analysis of such costs, and the technical positions related thereto; (o) advise the Debtors with their evaluation and modeling of the tax effects of liquidating, disposing of assets, merging or converting entities as part of the restructuring, including the effects on federal and state tax attributes, state incentives, apportionment, and other tax planning; (p) advise the Debtors on state income tax treatment and planning for restructuring or bankruptcy provisions in various jurisdictions, including cancellation of indebtedness calculations, adjustments to tax attributes, and limitations on tax attribute utilization; (q) advise the Debtors regarding potential intercompany claims between the Debtors' affiliates as well as relevant cross-border tax considerations related to the intercompany claims to the extent applicable; (r) advise the Debtors on responding to tax notices and audits from various taxing authorities; (s) assist the Debtors with identifying potential tax refunds and advise the Debtors on procedures for tax refunds from tax authorities; (t) advise the Debtors on income tax return calculations or reporting of restructuring, bankruptcy issues and related matters; (u) assist the Debtors with documenting, as appropriate, the tax analysis, development of the Debtors' opinions, recommendation, observations, and correspondence for any proposed restructuring alternative tax issue or other tax matters; and (v) as requested by the Debtors and as may be agreed to by Deloitte Tax, advise the Debtors regarding other state, federal, or international tax questions that may arise in the course of its engagement. The firm will be paid at these rates: Partner/Principal/Managing Director $1,015 per hour Senior Manager $893 per hour Manager $721 per hour Senior $655 per hour Staff $553 per hour Derek Krozek, managing director at Deloitte Tax, 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: Derek Krozek Deloitte Tax LLP 30 Rockefeller Plaza New York, NY, 10112-0015 Tel: (212) 492-4000 Fax: (212) 489-1687 Email: dkrozek@deloitte.com 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. Judge Christopher M. Lopez oversees the cases. The Debtors tapped Paul, Weiss, Rifkind, Wharton & Garrison, LLP and Porter Hedges, LLP as bankruptcy counsels; Wilmer Cutler Pickering Hale and Dorr, LLP as special corporate and litigation counsel; AlixPartners, LLP as financial advisor; Moelis & Company, LLC and LionTree Advisors, LLC as investment bankers; Deloitte Tax, LLP as tax advisor; Deloitte Financial Advisory Services, LLP as accountant; and Deloitte Consulting, LLP as consultant. Kroll Restructuring Administration, LLC is the claims agent. 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 Akin Gump Strauss Hauer & Feld, LLP. DIAMOND SPORTS: Seeks to Tap Moelis & Company as Investment Banker ------------------------------------------------------------------ Diamond Sports Group, LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire Moelis & Company, LLC. The Debtors require an investment banker to: (a) assist in reviewing and analyzing results of operations, financial condition and business plan of the Debtors; (b) assist in reviewing and formulating a marketing strategy for and analyzing any potential transaction; (c) assist the Debtors in negotiating any transaction and advise the Debtors as to timing, structure, and pricing of any capital transaction or exchange offer transaction, as applicable; (d) advise the Debtors on the terms of securities they offer in any potential capital transaction or exchange offer transaction, as applicable; (e) advise and assist the Debtors on the preparation of an information memorandum for a potential transaction; (f) assist the Debtors in contacting, identifying and evaluating potential counterparties or purchasers of a capital transaction that Moelis and the Debtors agree are appropriate, and meet with and provide them with information memo and additional information about the Debtors' assets, properties or businesses acceptable to the Debtors, subject to customary business confidentiality agreements; (g) at the Debtors' request, meet with representatives of the Debtors to discuss any transaction and its financial implications; and (h) provide other necessary investment banking services. The firm will be compensated as follows: Merger and Acquisition (M&A) Transaction Fee (i) At the closing of an M&A transaction, a non-refundable cash fee equal to: (a) 50 percent of 1.4 percent of transaction value for amounts up to $1.0 billion; plus (b) 50 percent of 0.9 percent of transaction value for amounts in excess of $1.0 billion. In the event of an M&A transaction that is consummated pursuant to Section 363 of the Bankruptcy Code, such transaction shall trigger an M&A transaction fee. For the avoidance of doubt, in no event shall the Debtors be required to pay an M&A transaction fee on more than one occasion. Opinion Fee (ii) A non-refundable cash fee equal to $2 million. The opinion fee is payable promptly upon the substantial completion by Moelis of the work in connection with rendering an opinion regardless of the conclusion Moelis reaches in the opinion. The opinion fee shall (to the extent previously paid or paid substantially concurrently with the payment of the M&A transaction fee) reduce (dollar for dollar) the amount of any M&A transaction fee payable under the Engagement Letter. Capital Transaction Fee (iii) At the closing of a capital transaction, a non-refundable cash fee equal to: (a) 50 percent of 3.5 percent of the aggregate gross amount or face value of capital raised in the capital transaction as equity interests, plus (b) 80 percent of 1.05 percent of the aggregate gross amount of debt obligations and other interests raised in the capital transaction. The Debtors will pay a separate capital transaction fee in respect of each capital transaction in the event that more than one capital transaction occurs. "Raised" includes the amount actually committed to the Debtors pursuant to definitive documentation whether or not the Debtors draw the full amount and whether or not the Debtors apply such amounts to refinance any of their obligations. Monthly Fee (iv) From and after the date of the Engagement Letter, a fee of $200,000 per month, payable in advance of each month. Fifty percent of each monthly fee after the first six monthly fees (to the extent previously paid or paid substantially concurrently with the payment of a restructuring fee), shall reduce (dollar for dollar) the amount of any restructuring fee payable under the Engagement Letter. Restructuring Fee (v) At the closing of a restructuring or an exchange offer transaction, as the case may be, a non-refundable fixed fee of $30 million. Asset Sale Transaction Fee (vi) At the closing of an asset sale transaction, a non-refundable cash fee equal to 50.0 percent of either (a) in the event that the asset sale transaction is consummated prior to the Debtors authorizing Moelis to contact entities that are not party to the governing documents applicable to the business or assets being sold with respect to the potential asset sale transaction, then 1.25 percent of the value of the business or assets being sold; or (b) in the event that the asset sale transaction is consummated following the Debtors authorizing Moelis to contact entities that are not party to the governing documents applicable to the business or assets being sold with respect to the potential asset sale transaction, then 2.5 percent of the value of the business or assets being sold regardless of the identity of the ultimate counterparty to such asset sale transaction. Zul Jamal, managing director at Moelis' Capital Structure Advisory Group, 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. Moelis can be reached through: Zul Jamal Moelis & Company, LLC 399 Park Avenue, 4th Floor New York, NY 10022 Tel: 1 212 883 3800 Fax: 1 212 880 4260 Email: zul.jamal@moelis.com 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. Judge Christopher M. Lopez oversees the cases. The Debtors tapped Paul, Weiss, Rifkind, Wharton & Garrison, LLP and Porter Hedges, LLP as bankruptcy counsels; Wilmer Cutler Pickering Hale and Dorr, LLP as special corporate and litigation counsel; AlixPartners, LLP as financial advisor; Moelis & Company, LLC and LionTree Advisors, LLC as investment bankers; Deloitte Tax, LLP as tax advisor; Deloitte Financial Advisory Services, LLP as accountant; and Deloitte Consulting, LLP as consultant. Kroll Restructuring Administration, LLC is the claims agent. 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 Akin Gump Strauss Hauer & Feld, LLP. DIAMOND SPORTS: Taps Deloitte Consulting LLP as Consultant ---------------------------------------------------------- Diamond Sports Group, LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire Deloitte Consulting, LLP as consultant. The Debtors require a consultant to: (a) assist in establishing a transition management office team and infrastructure; (b) assist with completing current state assessment of operational entanglements between the Debtors and Sinclair Broadcast Group, Inc. to include findings on current operational entanglements, assessing complexity and level of entanglements across people, processes, and technology derived from stakeholder interviews and current business processes and systems documentation; (c) provide input to and support the preparation of the Transition Service Agreement (TSA) Schedules in consultation with the Debtors with findings from the operational entanglements assessment; (d) assist with developing recommendations on interim operating model and organization structure for TSA period to prepare for Operational Day 1; (e) assist the Debtors with developing high-level future-state "blueprints" by function that outline the requirements and decisions for the Debtors to consider exiting the TSA and stand up the business, including the sequencing of separation activities and qualitative perspectives on cost optimization opportunities; and (f) develop high-level TSA exit roadmap recommendations to include timing and sequencing to stand up new operations as well as identification of stranded costs, and fulfilment of contractual agreements. Deloitte Consulting will charge the Debtors a fixed fee of $10.584 million, excluding expenses. The firm received $1,350,000 in retainer. As disclosed in court filings, Deloitte Consulting is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Iain Bamford Deloitte Consulting, LLP 200 Berkeley Street, 10th Street Boston, MA 02116 Phone: +1 617 437 2930 Email: ibamford@deloitte.com 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. Judge Christopher M. Lopez oversees the cases. The Debtors tapped Paul, Weiss, Rifkind, Wharton & Garrison, LLP and Porter Hedges, LLP as bankruptcy counsels; Wilmer Cutler Pickering Hale and Dorr, LLP as special corporate and litigation counsel; AlixPartners, LLP as financial advisor; Moelis & Company, LLC and LionTree Advisors, LLC as investment bankers; Deloitte Tax, LLP as tax advisor; Deloitte Financial Advisory Services, LLP as accountant; and Deloitte Consulting, LLP as consultant. Kroll Restructuring Administration, LLC is the claims agent. 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 Akin Gump Strauss Hauer & Feld, LLP. DIAMOND SPORTS: Taps Deloitte Financial Advisory as Accountant -------------------------------------------------------------- Diamond Sports Group, LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire Deloitte Financial Advisory Services, LLP as their accountant. The firm will render these services: Accounting and Financial Reporting (a) Advise and assist the Debtors with respect to the potential impact of their Chapter 11 cases and the plan of reorganization (POR) on the Debtors' existing financial reporting and data gathering processes, including the potential impact on the Debtors' financial reporting systems and chart of accounts. (b) Research of the relevant accounting literature applicable to certain transactions, as mutually agreed, and documentation or verbal communication of the results of that research for the Debtors' consideration in evaluating the appropriate accounting treatment, if requested. (c) Assist in the preparation of documentation of (i) new accounting policies and procedures or (ii) enhancements to current accounting policies and procedures, including, as necessary, the determination of reporting units, operating segments, and reportable segments. (d) Advise and assist the Debtors in the preparation of accounting information and disclosures in support of quarterly and annual financial statements and, as necessary, management's discussion and analysis of financial condition and results of operations. (e) Advise the Debtors in evaluating existing internal controls or in developing new controls for fresh-start accounting implementation. (f) Assist the Debtors with responses to questions or other requests from their external auditors regarding bankruptcy accounting and other financial reporting matters. (g) Assist the Debtors' management in project management for financial reporting and related valuation and tax accounting activities. Implementation of Accounting Guidance Related to the Chapter 11 filing and planning for, the Debtors' Determination of, and Substantiation of the Fresh-Start Balance Sheet Under ASC 852 (a) Advise the Debtors on scope of accounting and financial reporting changes introduced by their bankruptcy, pursuant to ASC 852. (b) Provide technical accounting training for certain personnel to enhance the Debtors' understanding of the scope of change introduced by the bankruptcy. (c) Assist the Debtors in the development of an implementation approach for fresh-start accounting, culminating in a strategy and work plan for the project. (d) Advise and provide recommendations to the Debtors in connection with the determination of the POR adjustments necessary to record the impact of the plan to the books of entry of the appropriate legal entities. As part of these efforts, Deloitte FAS will: 1. work with accounting, legal and tax advisors to advise the Debtors in determining the appropriate recoveries to allowed claimants and the allocation of resulting gains on extinguishment or other earnings impacts to separate legal entities within the Debtors' organizational structure; 2. analyze the POR and other related documents to identify and advise management and provide recommendations on accounting adjustments resulting from POR provisions; and 3. advise the Debtors in connection with estimating recoveries to claimants for accrual accounting purposes, including comparisons with the Debtors' claims database to estimate liabilities related to contingent, unliquidated and disputed claims. (e) Assist the Debtors in determining asset and liability fair values and other fresh-start adjustments as necessary to comply with the accounting and reporting requirements of ASC 852. This effort will be coordinated among bankruptcy, accounting, tax, and valuation specialists. (f) Advise and assist the Debtors on recording and substantiating adjustments to their opening fresh-start balance sheet, as applicable, and consequential ongoing impacts (e.g., depreciation and amortization) including assisting the Debtors in their preparation of analyses and packaging of other documentation to support adjustments, including internal control considerations. (g) In the Event of a Mid-Month Emergence: 1. Advise the Debtors on establishing appropriate one-time cutoff procedures for their consolidated balance sheet and the related consolidated statements of income, changes in stockholders' equity, and cash flows to facilitate successful financial reporting and internal control. 2. Assist the Debtors with planned procedures for determining appropriate Allocations, estimates and potential systems implications or reconfigurations, as needed. Valuation Services (a) Assist the Debtors in the identification of tangible and intangible assets as well as liabilities to be revalued at their fair value for fresh-start accounting purposes. (b) Assist the Debtors in estimating the fair value of specific assets and liabilities as specified by management, including performing valuations of certain assets and liabilities. (c) Advise the Debtors on assigning assets, including, without limitation, goodwill and liabilities to reporting units. (d) Assist the Debtors in coordinating valuation information for auditor review. (e) Advise the Debtors on addressing company-specific issues surrounding value allocation to specific assets, legal entities, cost centers, reporting units, operating segments or legal entities. (f) Assist the Debtors in connection with valuations for quarterly and year-end financial reporting and tax compliance requirements. (g) Assist the Debtors in other valuation matters as they deem necessary for financial reporting disclosures. Income Tax Accounting Services (analysis under the provisions of ASC Topic 740, Income Taxes) (a) Assist the Debtors in the preparation of their current and deferred tax computations to reflect the new financial reporting values due to the impacts of the POR and fresh-start accounting, including consideration of potential tax attribute reduction resulting from modification or cancellation of debt and the need for valuation allowances against deferred tax assets as of fresh start reporting date. (b) Assist the Debtors with financial statement income tax disclosures for predecessor and successor periods and the four-column condensed consolidated balance sheet. (c) Assist the Debtors with other income tax accounting, as requested. Deloitte FAS will bill its hourly fees as follows: Accounting services, including income tax accounting: Partner/Principal/Managing Director $850 - $1,050 Senior Manager/Senior Vice President $725 - $775 Manager/Vice President $610 - $660 Senior Consultant $475 - $575 Consultant $375 - $450 Valuation services Partner/Principal/Managing Director $750 - $850 Senior Manager/Senior Vice President $585 - $685 Manager/Vice President $545 - $645 Senior Consultant $450 - $550 Consultant $350 - $425 Michael Sullivan, managing director at Deloitte FAS, 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 through: Michael C. Sullivan Deloitte Financial Advisory Services, LLP New York - National Office 30 Rockefeller Plaza, 41st floor New York, NY 10112-0015 Phone: +1 347 899 6036 Email: michsullivan@deloitte.com 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. Judge Christopher M. Lopez oversees the cases. The Debtors tapped Paul, Weiss, Rifkind, Wharton & Garrison, LLP and Porter Hedges, LLP as bankruptcy counsels; Wilmer Cutler Pickering Hale and Dorr, LLP as special corporate and litigation counsel; AlixPartners, LLP as financial advisor; Moelis & Company, LLC and LionTree Advisors, LLC as investment bankers; Deloitte Tax, LLP as tax advisor; Deloitte Financial Advisory Services, LLP as accountant; and Deloitte Consulting, LLP as consultant. Kroll Restructuring Administration, LLC is the claims agent. 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 Akin Gump Strauss Hauer & Feld, LLP. DIAMOND SPORTS: Taps LionTree Advisors as Investment Banker ----------------------------------------------------------- Diamond Sports Group, LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire LionTree Advisors, LLC as investment banker. The Debtors require an investment banker to: (a) assist in reviewing and analyzing results of operations, financial condition and business plan of the Debtors; (b) assist in reviewing and formulating a marketing strategy for and analyzing any potential transaction; (c) assist the Debtors in negotiating any transaction and advise the Debtors as to timing, structure, and pricing of any capital transaction or exchange offer transaction, as applicable; (d) advise the Debtors on the terms of securities they offer in any potential capital transaction or exchange offer transaction, as applicable; (e) advise and assist the Debtors in the preparation of an information memorandum for a potential transaction; (f) assist the Debtors in contacting, identifying and evaluating potential counterparties or purchasers of a capital transaction that LionTree and the Debtors agree are appropriate, and meet with and provide them with information memo and additional information about the Debtors' assets, properties or businesses acceptable to the Debtors, subject to customary business confidentiality agreements; (g) at the Debtors' request, meet with representatives of the Debtors to discuss any transaction and its financial implications; and (h) provide other necessary investment banking services. The firm will be compensated as follows: Merger and Acquisition (M&A) Transaction Fee (i) At the closing of an M&A transaction, a non-refundable cash fee equal to: (a) 50 percent of 1.4 percent of transaction value for amounts up to $1.0 billion; plus (b) 50 percent of 0.9 percent of transaction value for amounts in excess of $1.0 billion. In the event of an M&A transaction that is consummated pursuant to Section 363 of the Bankruptcy Code, such transaction shall trigger an M&A transaction fee. For the avoidance of doubt, in no event shall the Debtors be required to pay an M&A transaction fee on more than one occasion. Opinion Fee (ii) A non-refundable cash fee equal to $2 million. The opinion fee is payable promptly upon the substantial completion by LionTree of the work in connection with rendering an opinion regardless of the conclusion the firm reaches in the opinion. The opinion fee shall reduce (dollar for dollar) the amount of any M&A transaction fee payable under the Engagement Letter. Capital Transaction Fee (iii) At the closing of a capital transaction, a non-refundable cash fee equal to: (a) 50 percent of 3.5 percent of the aggregate gross amount or face value of capital raised in the capital transaction as equity interests, plus (b) 20 percent of 1.05 percent of the aggregate gross amount of debt obligations and other interests raised in the capital transaction. The Debtors will pay a separate capital transaction fee in respect of each capital transaction in the event that more than one capital transaction occurs. "Raised" includes the amount actually committed to the Debtors pursuant to definitive documentation whether or not the Debtors draw the full amount and whether or not the Debtors apply such amounts to refinance any of their obligations. Monthly Fee (iv) From and after the date of the Engagement Letter, a fee of $150,000 per month, payable in advance of each month. Fifty percent of each monthly fee after the first six monthly fees shall reduce (dollar for dollar) the amount of any restructuring fee payable under the Engagement Letter. Restructuring Fee (v) Upon the completion of a restructuring or an exchange offer transaction, as the case may be, a non-refundable fixed fee of $15 million. Asset Sale Transaction Fee (vi) At the closing of an asset sale transaction, a non-refundable cash fee equal to 50.0 percent of either (a) in the event that the asset sale transaction is consummated prior to the Debtors authorizing LionTree to contact entities that are not party to the governing documents applicable to the business or assets being sold with respect to the potential asset sale transaction, then 1.25 percent of the value of the business or assets being sold; or (b) in the event that the asset sale transaction is consummated following the Debtors authorizing LionTree to contact entities that are not party to the governing documents applicable to the business or assets being sold with respect to the potential asset sale transaction, then 2.5 percent of the value of the business or assets being sold regardless of the identity of the ultimate counterparty to such asset sale transaction. Ben Braun, a partner at LionTree, 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 through: Ben Braun LionTree Advisors, LLC 660 Madison Ave Ste 1502 New York, NY 10065 Phone: +1-212-644-4200 Email: info@liontree.com 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. Judge Christopher M. Lopez oversees the cases. The Debtors tapped Paul, Weiss, Rifkind, Wharton & Garrison, LLP and Porter Hedges, LLP as bankruptcy counsels; Wilmer Cutler Pickering Hale and Dorr, LLP as special corporate and litigation counsel; AlixPartners, LLP as financial advisor; Moelis & Company, LLC and LionTree Advisors, LLC as investment bankers; Deloitte Tax, LLP as tax advisor; Deloitte Financial Advisory Services, LLP as accountant; and Deloitte Consulting, LLP as consultant. Kroll Restructuring Administration, LLC is the claims agent. 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 Akin Gump Strauss Hauer & Feld, LLP. DIAMOND SPORTS: Taps Paul Weiss Rifkind Wharton as Legal Counsel ---------------------------------------------------------------- Diamond Sports Group, LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire Paul, Weiss, Rifkind, Wharton & Garrison LLP as their bankruptcy counsel. The firm's services include: a) providing legal advice to the Debtors with respect to their powers and duties in the continued operation of their business and management of their properties; b) attending meetings and negotiating with representatives of creditors, equity holder and other parties in interest, and advising the Debtors on the conduct of their bankruptcy cases, including the legal and administrative requirements of operating in Chapter 11; c) undertaking investigations into estate claims and causes of action and taking necessary action to protect and preserve the Debtors' estates; d) preparing and prosecuting motions, applications and other legal papers; e) advising and assisting the Debtors with financing and transactional matters; f) appearing in court; and g) performing other legal services for the Debtors that may be necessary and proper in these Chapter 11 cases. The firm will be paid at these rates: Partners $1,695 to $2,175 per hour Counsel $1,650 per hour Associates $825 to $1,380 per hour Paraprofessionals $125 to $405 per hour In addition, the firm will receive reimbursement for out-of-pocket expenses incurred. The Debtors paid $1,500,000 to Paul as an initial retainer. Subsequently, the Debtors paid the firm additional retainers totaling $11,527,884.07 during the 90-day period immediately preceding the petition date. In accordance with Appendix B-Guidelines for reviewing fee applications filed by attorneys in larger Chapter 11 cases, Paul disclosed the following: Question: Did you agree to any variations from, or alternatives to, your standard or customary billing arrangements for this engagement? Response: No. Question: Do any of the professionals included in this engagement vary their rate based on the geographic location of the bankruptcy case? Response: No. Question: If you represented the client in the 12 months prepetition, disclose your billing rates and material financialterms for the prepetition engagement, including any adjustments during the 12 months prepetition. If your billing rates and material financial terms have changed postpetition, explain the difference and the reasons for the difference. Response: The firm typically adjusts its billing rates on an annual basis effective October 1st of each year. Accordingly, Paul's rates for timekeepers for its pre-bankruptcy engagement on this matter for the period May 18 to Sept. 31, 2022 were as follows: $1,330 to $1,825 for partners, $1,400 for counsel, $700 to $1,185 for associates, and $125 to $405 for paraprofessionals. Meanwhile, the hourly rates for the period Oct. 1, 2022 to the petition date were as follows: $1,695 to $2,175 for partners, $1,650 for counsel, $825 to $1,380 for associates, and $145 to $470 for paraprofessionals. Question: Has your client approved your prospective budget and staffing plan, and, if so for what budget period? Response: Yes, from the petition date to June 30, 2023. Brian Hermann, Esq., a partner at Paul, disclosed in a court filing that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Brian S. Hermann, Esq. Paul Weiss Rifkind Wharton & Garrison, LLP 1285 Avenue of the Americas New York, NY 10019 Tel: +1-212-373-3545 Fax: +1-212-492-0545 Email: bhermann@paulweiss.com 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. Judge Christopher M. Lopez oversees the cases. The Debtors tapped Paul, Weiss, Rifkind, Wharton & Garrison, LLP and Porter Hedges, LLP as bankruptcy counsels; Wilmer Cutler Pickering Hale and Dorr, LLP as special corporate and litigation counsel; AlixPartners, LLP as financial advisor; Moelis & Company, LLC and LionTree Advisors, LLC as investment bankers; Deloitte Tax, LLP as tax advisor; Deloitte Financial Advisory Services, LLP as accountant; and Deloitte Consulting, LLP as consultant. Kroll Restructuring Administration, LLC is the claims agent. 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 Akin Gump Strauss Hauer & Feld, LLP. DNP EATS: Files Emergency Bid to Use Cash Collateral ---------------------------------------------------- DNP Eats, LLC asks the U.S. Bankruptcy Court for the Central District of California, Los Angeles Division, for authority to use cash collateral in accordance with its agreement with the U.S. Small Business Administration. The Debtor and the SBA reached an agreement on the Debtor's consensual use of the SBA's cash collateral by providing the SBA with the provisions of adequate protection to pay the SBA under the contractual contract of $2,575 per month when due and replacement liens on the assets in which the SBA had a prepetition security interest or lien. The SBA asserts a secured claim in the amount of $514,679. The Debtor requires the use of cash collateral for the payment of certain operating expenses of its business. Pre-petition, on March 11, 2022, the Debtor executed a U.S. Small Business Administration Note, pursuant to which the Debtor obtained a COVID-19 Economic Injury Disaster Loan in the amount of $500,000. The terms of the Note require the Debtor to pay principal and interest payments of $2,575 every month beginning 24 months from the date of the Note over the 30-year term of the SBA Loan, with a maturity date of on March 11, 2052. The SBA Loan has an annual rate of interest of 3.75% and may be prepaid at any time without notice or penalty. As of the Petition Date, the amount due on the SBA Loan was $514,679. As evidenced by a Security Agreement executed on March 11, 2022, and a valid UCC-1 filing on March 25, 2022 as Filing Number U220178291736, the SBA Loan is secured by all tangible and intangible personal property. A copy of the motion is available at https://bit.ly/4205AWI from PacerMonitor.com. About DNP Eats, LLC DNP Eats, LLC is part of the food service industry. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-12093) on April 6, 2023. In the petition signed by Dan Pham, managing member, the Debtor disclosed up to $500,000 in assets and up to $10 million in liabilities. Blake J. Lindemann, Esq., at Lindemann Law, APC, represents the Debtor as legal counsel. EDGEWATER CONSTRUCTION: Taps Touron Law as Construction Counsel --------------------------------------------------------------- Edgewater Construction Group, Inc. seeks approval from the U.S. Bankruptcy Court for the Southern District of Florida to hire Touron Law as its special construction counsel. Touron Law will assist the Debtor in connection with its industry-specific needs. Specifically, as of the petition date, the Debtor was a party to several actions pending in other courts, which included (or would include) affirmative claims to recover funds rightly due the Debtor. The firm's regular rates for lawyers range from $250 to $600 per hour. Francisco Touron III, Esq., the firm's managing member, has agreed to reduce his regular hourly rate of $600 to $450 for this matter. As disclosed in court filings, Touron Law is a "disinterested person" within the meaning of Section 101 (14) of the Bankruptcy Code. The firm can be reached through: Francisco Touron III, Esq. Touron Law 2665 S. Bayshore Drive, Ste. 300 Miami, FL 33133 Office: 305-441-9355 Cell: 305-297-7095 Fax: 305-443-2048 Email: info@touronlaw.com Edgewater Construction Group Edgewater Construction Group, Inc. is a Miami-based company that provides general contractor services. The company has been in business since February 1999. Edgewater filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-12217) on March 22, 2023, with up to $50,000 in assets and $1 million to $10 million in liabilities. Ulysses Vazquez, II, president of Edgewater, signed the petition. Judge Laurel M. Isicoff presides over the case. The Debtor tapped Jacqueline Calderin, Esq., at Agentis, PLLC as bankruptcy counsel and Touron Law as special construction counsel. EMERALD DEBT: Fitch Assigns 'BB(EXP)' LongTerm IDR, Outlook Stable ------------------------------------------------------------------ Fitch Ratings has assigned a Long-Term Issuer Default Rating (IDR) of 'BB(EXP)' to Emerald Debt Merger Sub L.L.C. (Emerald), an affiliate of Blackstone Capital Partners VIII L.P., formed for the purpose of acquiring Emerson Electric Co.'s (Emerson) Climate Technologies business (dba Copeland). The Outlook is Stable. Fitch has also assigned a rating of 'BB+(EXP)'/'RR2' to the proposed Secured Term Loan B and a rating of 'BBB-(EXP)'/'RR1' rating to the proposed $700 million ABL revolver. Proceeds from the term loan will be used to cover a portion of the acquisition costs for Copeland. The issuer is expected to become EMRLD Borrower LP, a newly formed entity owned by Blackstone and Emerson Electric Co., after the acquisition is completed. Conversion of the expected ratings to final ratings is contingent on the transactions closing as contemplated and receipt of final documents conforming materially to preliminary documentation reviewed, including sizing of the new debt instruments. KEY RATING DRIVERS Ratings Overview: Emerald's IDR reflects Fitch's expected pro-forma post acquisition credit profile of Copeland. Copeland's credit profile is supported by its leading market position in HVACR compressors and a cash flow risk profile that is comparable to 'BBB' category peers. The ratings are mainly constrained by its financial profile, with Fitch-calculated EBITDA Leverage of mid/low-4x through FYE2024, consistent with 'BB' rating tolerances. Blackstone Acquisition: In October 2022, Blackstone and Emerson entered into a definitive agreement whereby Blackstone would acquire a majority stake in Copeland. The deal valued Copeland at an enterprise value of $14 billion. Emerson will receive upfront pre-tax cash proceeds of approximately $9.5 billion while retaining significant preferred equity and minority common equity stakes. Large Scale, Market Leader: Copeland's credit profile is underpinned by its strong market position and large scale, with annual revenues of more than $5 billion and EBITDA of more than $1 billion. The company is the clear market leader in HVACR compressors and related solutions, with a well-recognized brand, technological leadership and a global presence. Compressors are a mission critical component of HVAC systems, consuming the vast majority of system power but accounting for just a small portion of overall HVAC unit cost. Stable Demand, Secular Tailwinds: Copeland has a long track record of resilient operating performance through economic cycles. Its revenues are supported by a large global installed base and non-discretionary demand, with 80% of revenues tied to replacement and aftermarket sales. At the same time, the company benefits from secular growth drivers including sustainability and energy efficiency, particularly in Europe where regulatory changes are likely to accelerate the adoption of hydronic heat pumps in lieu of boilers. Strong Profitability: Copeland's strong and stable margin profile reflects its technological leadership, market position and pricing power. The company generates EBITDA margins in the low twenties and FCF margins in the high single-digits to low teens, which is strong even compared to investment-grade peers, and gives the company significant financial flexibility. The company has undertaken some restructuring initiatives in recent years and management has identified additional cost savings opportunities, with potential to further improve profitability by $200 million-$300 million per year. Improving Leverage Metrics Forecasted: Copeland's credit profile is mainly constrained by elevated post-acquisition leverage in the near-term. Following its majority stake sale to Blackstone, Fitch expects EBITDA Leverage of about 4.7x at FYE2023, which is relatively high compared to 'BB' rated peers. This is mitigated by Copeland's earnings stability a consistent FCF of more than $300 million per year that gives the company capacity to reduce EBITDA leverage to around 3.5x by end-fiscal 2025, which is more in-line with 'BB+' rating tolerances. Incentives to Prioritize Deleveraging: Despite the 55% private equity ownership and lack of a stated leverage target, Fitch believes that management is incentivized to prioritize debt reduction over equity distributions in the near-term in order to facilitate the three- to five-year target for an IPO. Emerson, the seller, retains a significant minority stake (45%), which Fitch views as credit supportive. Under the JV agreement, Emerson will have influence over certain key financial policies and decisions, including acquisitions and debt incurrence over certain thresholds. Management does not expect large scale acquisitions in the near term, though small bolt-on deals are possible. PIK Instruments Treated as Equity: Fitch treats the PIK-only instruments held by Blackstone and Emerson as equity in accordance with Fitch's criteria for rating Holdco PIK Shareholder Loans. Both securities are issued outside of the restricted group, subordinated to third-party debt, and are PIK-only (paid-in-kind) with no cash payment. Both securities have longer-dated final maturity compared to third-party debt. DERIVATION SUMMARY Copeland's ratings are supported by its leading market position in the HVAC compressor market, large scale, stable earnings driven by replacement and aftermarket sales, and strong free cash flow generation. Copeland's business profile is comparable with 'BBB' category peers in the industrials sector, such as Carrier (BBB-/Stable), Regal Rexnord (BBB-/Stable), and Vontier (BBB-/Negative). However, Copeland will have higher leverage, with projected EBITDA Leverage of mid/low-4x through FYE2024. There are few close peers in the 'BB' category. Compared to WESCO (BB/Positive), a distributor of electrical products, Copeland has comparable EBITDA scale, better margins and cash flow stability but slightly higher leverage in the near term. Copeland's leverage is much higher than Atkore (BB+/Stable), a manufacturer of electrical and tubular products, but generates more stable EBITDA and FCF and is exposed to less cyclical end markets. KEY ASSUMPTIONS - Low single digit revenue decline in FY2023, followed by low-to-mid-single digit growth in FY2024-2026. - EBITDA margins to expand to over 25% in FY2025, from around 22% in FY2022, which reflects normalization of supply chain pressures in 2022, lagged contract price recovery, the impact of prior year restructuring, and around 50% of the cost saving opportunities projected by management. - Capex is forecast to be 5%-7% of revenues in FY2023-2024, driven by investments in new manufacturing facilities, stabilizing at around 3% of revenues thereafter. - Effective interest rate of approximately 8% over the forecast period. - FCF to be used mainly to repay debt. No common dividends or major acquisitions are expected. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Adherence to stated capital allocation priorities and financial policy that lead to gross debt reduction and EBITDA Leverage sustained below 3.75x; - Demonstrated progress towards executing cost savings and growth initiatives. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Opportunistic financial policy or operational challenges that leads to EBITDA Leverage sustained above 4.25x; - Shifting ownership and governance structure which results in a change in capital allocation priorities. LIQUIDITY AND DEBT STRUCTURE Under the proposed capital structure, Copeland's debt structure will mainly consist of an undrawn $700 million ABL revolver and $5.5 billion in secured debt that matures in 5-7 years. The company's liquidity profile is comfortable, with no expected near-term debt maturities and capex needs that are well-covered by operating cash flows. ISSUER PROFILE Copeland is a leading provider of compression products, electronics, software and solutions across many applications within Heating, Ventilation, Air Conditioning and Refrigeration (HVACR), other heating applications, food service, retail, transportation, and healthcare/life sciences. 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 ----------- ------ -------- Emerald Debt Merger Sub L.L.C. LT IDR BB(EXP) Expected Rating senior secured LT BBB-(EXP)Expected Rating RR1 senior secured LT BB+(EXP) Expected Rating RR2 ENDO INTERNATIONAL: Committee Taps Lowenstein as Special Counsel ---------------------------------------------------------------- The official committee of unsecured creditors of Endo International plc and its affiliates seeks approval from the U.S. Bankruptcy Court for the Southern District of New York to employ Lowenstein Sandler, LLP. The firm will serve as the committee's special counsel and will perform all necessary legal services including, but not limited to, any matters from which Kramer Levin Naftalis & Frankel, LLP, the committee's bankruptcy counsel, might be conflicted. Lowenstein's hourly rates are as follows: Partners $690 - $1,365 Of Counsel $810 - $1,475 Senior Counsel $610 - $1,410 Counsel $575 - $1,070 Associates $475 - $965 Paralegals $240 - $425 Jeffrey Cohen, Esq., a partner at Lowenstein, disclosed in a court filing that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Jeffrey L. Cohen, Esq. Michael S. Etkin, Esq. Lowenstein Sandler, LLP 1251 Avenue of the Americas New York, NY 10020 Tel: (212) 715-9100 Email: jcohen@lowenstein.com About Endo International plc Endo International plc is a generics and branded pharmaceutical company. It develops, manufactures, and sells branded and generic products to customers in a wide range of medical fields, including endocrinology, orthopedics, urology, oncology, neurology, and other areas. On the Web: http://www.endo.com/ On August 16, 2022, Endo International and certain of its subsidiaries initiated voluntary prearranged Chapter 11 proceedings (Bankr. S.D.N.Y. Lead Case No. 22-22549). The cases are pending before Judge James L. Garrity, Jr. The Debtors have put up a Web site dedicated to its restructuring: http://www.endotomorrow.com/ The Debtors tapped Skadden, Arps, Slate, Meagher & Flom, LLP as legal counsel; PJT Partners, LP as investment banker; and Alvarez & Marsal North America, LLC as financial advisor. Kroll Restructuring Administration, LLC is the claims agent and administrative advisor. Roger Frankel, the legal representative for future claimants in these Chapter 11 cases, tapped Frankel Wyron LLP and Young Conaway Stargatt & Taylor, LLP as legal counsels, and Ducera Partners, LLC as investment banker. The U.S. Trustee for Region 2 appointed an official committee of unsecured creditors on Sept. 2, 2022. The committee tapped Kramer Levin Naftalis & Frankel as legal counsel; Lazard Freres & Co. LLC as investment banker; and Dundon Advisers, LLC and Berkeley Research Group, LLC as financial advisors. Meanwhile, the official committee representing the Debtors' opioid claimants tapped Cooley, LLP as bankruptcy counsel; Akin Gump Strauss Hauer & Feld, LLP as special counsel; Province, LLC as financial advisor; and Jefferies, LLC as investment banker. David M. Klauder, Esq., the court-appointed fee examiner, is represented by Bielli & Klauder, LLC. ENVISION HEALTHCARE: Mulling Debt-for-Equity Plan in Chapter 11 --------------------------------------------------------------- Alexander Saeedy and Alexander Gladstone of The Wall Street Journal reports that KKR & Co.'s Envision Healthcare Corp. is exploring a chapter 11 bankruptcy that would give control of the physician-staffing company to its creditors, according to people familiar with the matter. Envision is in negotiations with some of its lenders about a restructuring that could result in KKR, its private-equity owner, writing down its stake, these people said. The staffing company has struggled with debt, litigation and other headwinds since KKR bought it in 2018 for roughly $6 billion, excluding debt, in one of the private-equity. 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. It offers surgery, pharmacy, medical imaging, emergency care, and other related health care services. Envision Healthcare serves patients in the United States. EVOKE PHARMA: USPTO Issues Patent for GIMOTI Nasal Spray -------------------------------------------------------- Evoke Pharma, Inc. announced that the United States Patent and Trademark Office issued U.S. patent No. 11,628,150 for GIMOTI nasal spray. The patent, entitled "Nasal Formulations of Metoclopramide," will expire in 2029 and covers the nasal solution of metoclopramide and its characteristics when formulated. The Company will seek to list this patent in the FDA Orange Book in the near term. About Evoke Pharma Headquartered in Solana Beach, California, Evoke Pharma, Inc. -- http://www.evokepharma.com-- is a specialty pharmaceutical company focused primarily on the development of drugs to treat GI disorders and diseases. The Company is developing Gimoti, a nasal spray formulation of metoclopramide, for the relief of symptoms associated with acute and recurrent diabetic gastroparesis in adult women. Evoke Pharma reported a net loss of $8.22 million for the year ended Dec. 31, 2022, compared to a net loss of $8.54 million for the year ended Dec. 31, 2021. San Diego, California-based BDO USA, LLP, the Company's auditor since 2014, issued a "going concern" qualification in its report dated March 21, 2023, citing that the Company has suffered recurring losses and negative cash flows from operations since inception. These factors raise substantial doubt about the Company's ability to continue as a going concern. FIELDERS CHOICE: Case Summary & Seven Unsecured Creditors --------------------------------------------------------- Debtor: Fielders Choice, LLC 175 Semoran Commerce Place, Ste D Apopka, FL 32703 Chapter 11 Petition Date: April 25, 2023 Court: United States Bankruptcy Court Middle District of Florida Case No.: 23-01562 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: $132,356 Total Liabilities: $1,355,511 The petition was signed by Richard Berny as managing member. A full-text copy of the petition containing, among other items, a list of the Debtor's seven unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/4EQBBEA/Fielders_Choice_LLC__flmbke-23-01562__0001.0.pdf?mcid=tGE4TAMA FIVE64 LLC: Seeks $650,000 DIP Loan from Cartwheel Acquisition -------------------------------------------------------------- Five64, LLC and 64 IP Holdings, LLC ask the U.S. Bankruptcy Court for the Northern District of Texas, Dallas Division, for authority to use cash collateral and obtain postpetition financing. The Debtors seek, inter alia, to enter into post-petition financing for the principal sum of $650,000, consisting of up to $450,000 of new-money postpetition financing, and a "roll up" of $200,000 of prepetition secured debt by and through a Senior Secured Superpriority Debtor-in-Possession Loan and Security Agreement and all ancillary documents with Cartwheel Acquisition Sub, Inc., the Debtors' proposed DIP financier, and assignee of the prepetition Secured Loan. The Debtors believe that the proposed DIP Facility represents significantly better-than-market terms to the Debtors. Moreover, the DIP Lender is a proposed "stalking horse" purchaser of substantially all of the Debtors' assets at a proposed purchase price that, if realized, will be sufficient to pay all of the Debtors' creditors in full. Given the size of the stalking horse bid, all of the Debtors' other prepetition secured lenders are adequately protected against any diminution of their interest in the Debtors' assets on account of the priming liens the Debtors seek to grant the DIP Lender. The maturity date, unless extended by the DIP Lender, will be the earlier of: (i) 90 calendar days after the Closing Date; (ii) the consummation of a sale of all or substantially all of the assets of the Borrowers; (iii) the occurrence of an Event of Default after the expiration of all applicable grace or cure periods; (iv) upon acceptance by the Borrowers of any offer or bid for the purchase of all or substantially all of the assets of the Borrowers or all of the equity of reorganized Borrowers to a buyer that does not provide for the actual payment in full of all Indebtedness owed under the Facility by no later than the Outside Date, or (v) unless waived by the Lender in its sole discretion, the date that the Borrowers file a motion with the Bankruptcy Court for authority to proceed with the sale or liquidation of the Borrowers -- or any material portion of the assets or all of the equity of the Borrowers -- without the consent of the Lender except pursuant to a proposed sale of all or substantially all of the Borrowers' assets or all of the equity of reorganized Borrowers to a buyer that provides for the actual payment in full of the Facility by no later than the Outside Date. The Debtors seeks entry of an order: (i) "rolling up" the Secured Loan into the DIP Facility; (ii) granting the DIP Lender first priority perfected priming security interest and Liens in and on all of the Collateral as set forth in Section 3.1 of the DIP Facility; (iii) granting the DIP Lender a super-priority administrative expense claim in the full amount of the DIP Debt in accordance with 11 U.S.C. section 364(c), subject to the Carve-Out; and (iv) subordinating all Prepetition Liens to a priority junior to the DIP Lender. The "Carve Out" means the sum of (i) all fees and expenses required to be paid to the Clerk of the Court and the United States Trustee pursuant to 28 U.S.C. section 1930(a) plus interest at the statutory rate; (ii) all reasonable fees and expenses up to $10,000 incurred by any Subchapter 5 trustee appointed in these Bankruptcy Cases; and (iii) to the extent allowed by Court order, all unpaid fees and expenses accrued or incurred by persons or firms retained by the Debtors and any statutorily appointed committee in these cases, in an aggregate amount not to exceed $150,000. The Debtors are required to comply with these milestones: (a) Entry of the Final Order within 30 days following entry of the Interim Order; (b) Filing, within three days of the Petition Date, a motion, in form and substance acceptable to the Lender, to sell substantially all of the Debtors' assets pursuant to section 363 of the Bankruptcy Code and a motion approving a process for the Debtors to sell substantially all of their assets with the Lender as the "stalking horse" with bid protections acceptable to the Lender; (c) Entry of a Court order within 10 days of the Petition Date approving the Bid Procedures Motion; and (d) Entry of a Court order within 30 days of the Closing Date in a form and substance acceptable to the Lender authorizing the Debtors to sell substantially all of their assets, including the Collateral, to the Lender in accordance with section 363 of the Bankruptcy Code. In 2021, in addition to servicing individual motor vehicle dealerships, Five64 started to service non-regulated financial institutions. Due to this growth -- and continued anticipated growth -- Five64 expanded its footprint at its Cleburne, Texas headquarters to accommodate additional personnel and additional equipment and furnishings. Since then, however, Five64 has encountered cash flow issues, including due to the failure of Avalara, Inc. -- one of Five64's larger customers -- to timely pay for services. As a result, Five64 approached several factoring companies to obtain funds for operations. Five64 entered into agreements with several "factoring" companies. Due to the usurious -- and, the Debtors submit, illegal -- nature of the Factoring Agreements, Five64's cashflow issues were compounded. The Debtors reserve all rights with respect to the Factors and the Factoring Agreements. In an attempt to address this cash flow dilemma, the Debtors reached out to several industry partners, including Avalara, Carleton, Ryder and Westlake, as well as two private equity firms, to discuss a strategic transaction -- including a possible joint venture or sale of the Debtors. Avalara and Carleton initially expressed interest without a successful outcome. While a private equity group expressed interest in a purchase transaction, it did not come to fruition. The DIP Lender then proposed a transaction in which it would both (i) seek the acquisition of substantially all of the Debtors' assets, and (ii) finance the Debtors' operations through the DIP Facility to allow the Debtors appropriate runway for an orderly bankruptcy proceeding and the administration and payment of claims. After completing certain due diligence, management of Five64 reached the conclusion that the best way forward with a purchase transaction was a prepackaged Section 363 purchase through a Chapter 11 filing by Five64 and 64IP. In order to assist with the Debtors' continuing prepetition liquidity difficulties, on March 28, 2023, the DIP Lender's assignor entered into a Secured Promissory Note evidencing a loan to Debtor Five64, LLC in the original principal amount of $200,000. The Debtor's obligations under the Secured Loan are secured by a properly perfected lien on substantially all of the Debtor's assets. The DIP Lender recognizes that, as of the Petition Date, the DIP Lender's liens under the Secured Loan and Secured Loan UCC-1 were potentially junior in priority to other prepetition parties, subject to all of the Debtors' rights and causes of action against those. The Debtors will continue operating in the ordinary course during the time period, with an expected closing date approximately 30 days from the Petition Date. A copy of the motion is available at https://bit.ly/3AnUteh from PacerMonitor.com. About Five64, LLC Five64, LLC is a developer and provider of interstate and state vehicle registration solutions headquartered in Texas, United States. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-30767) on April 19, 2023. In the petition signed by Hoke Smith and Pamela Smith as chief executive officer and member, respectively, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Sandra R. Klein oversees the case. Thomas D. Berghman, Esq., at Munsch Hardt Kopf and Harr, P.C. represents the Debtor as legal counsel. FTX GROUP: Exchange Revival Plan Draws Possible Bid From Tribe -------------------------------------------------------------- Yueqi Yang and Jeremy Hill of Bloomberg News report that FTX's potential plan to reboot its crypto exchange has attracted interest from Tribe Capital, a venture firm that invested in the platform before FTX collapsed and is now considering a fresh capital injection to jump-start the effort. Tribe co-founder Arjun Sethimet with FTX's committee of unsecured creditors in January 2023 to discuss the informal proposal, according to people familiar with the matter, who asked not to be identified discussing confidential talks. Tribe is considering leading a $250 million fund-raising campaign, anchored by $100 million from itself and its limited partners, one of the people 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. G & G TOWERING: Case Summary & Two Unsecured Creditors ------------------------------------------------------ Debtor: G & G Towering Investments Inc. d/b/a Majestic Transportation & Shuttle Service 3512 McLean Road Pearland TX 77584-9007 Chapter 11 Petition Date: April 25, 2023 Court: United States Bankruptcy Court Eastern District of Texas Case No.: 23-31458 Judge: Hon. Eduardo V. Rodriguez Debtor's Counsel: Margaret M. McClure, Esq. LAW OFFICE OF MARGET M. MCCLURE 25420 Kuykendahl Road, Suite B300-1043 The Woodlands, TX 77375 Tel: 713-659-1333 Email: margaret@mmmcclurelaw.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by Evan D. Gentry as president. A copy of the Debtor's list of two unsecured creditors is availabel for free at PacerMonitor.com at: https://www.pacermonitor.com/view/D6A6RRQ/G__G_Towering_Investments_Inc__txsbke-23-31458__0006.0.pdf?mcid=tGE4TAMA A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/J7RDO2I/G__G_Towering_Investments_Inc__txsbke-23-31458__0001.0.pdf?mcid=tGE4TAMA GALAXY NEXT: Rodefer Moss Replaces Somerset CPAs as Auditor ----------------------------------------------------------- Galaxy Next Generation, Inc. disclosed in a Form 8-K filed with the Securities and Exhange Commission that the Board of Directors of the Company approved the dismissal of, and dismissed Somerset CPAs and Advisors and Rodefer Moss & Co, PLLC was engaged to serve as the independent registered public accounting firm of the Company for the year ending June 30, 2023, effective immediately. The dismissal of Somerset and the engagement of Rodefer was approved by the Company's Board of Directors. The services previously provided by Somerset will now be provided by Rodefer. Somerset's reports on the Company's consolidated financial statements for the fiscal years ended June 30, 2022 and 2021 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles, except as follows: Somerset's report on the consolidated financial statements of the Company and subsidiaries as of and for the years ended June 30, 2022 and 2021 contained a separate paragraph stating that: "The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 14 to the consolidated financial statements, the Company has suffered recurring losses from operations, recurring negative operating cash flows and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty." During the Company's two most recent fiscal years ended June 30, 2022 and 2021, and the subsequent interim period from July 1, 2022 through April 15, 2023, there were no disagreements between the Company and Somerset on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Somerset, would have caused Somerset to make reference to the subject matter of the disagreements in connection with its reports on the Company's consolidated financial statements for such years. In addition, during the Company's two most recent fiscal years ended June 30, 2022 and 2021, and the subsequent interim period from July 1, 2022 through April 15, 2023, there were no "reportable events," as defined in Item 304(a)(1)(v) of Regulation S-K. As previously disclosed in Item 9A of the Company's Annual Reports on Form 10-K for each of the fiscal years ended June 30, 2022 and 2021, the Company concluded that its internal control over financial reporting was not effective as of June 30, 2022 and 2021 due to certain material weaknesses. The material weakness relates to the fact that the Company's management is relying on external consultants for purposes of preparing its financial reporting package; however, the officers may not be able to identify errors and irregularities in the financial reporting package before its release as a continuous disclosure document. The Company said that during the fiscal years ended June 30, 2022 and 2021 and the subsequent interim period from July 1, 2022 through April 15, 2023, neither the Company nor anyone on its behalf consulted with Rodefer regarding (i) the application of accounting principles to any specified transaction, either completed or proposed or the type of audit opinion that might be rendered on the Company's consolidated financial statements, and neither a written report nor oral advice was provided to the Company that Rodefer concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing, or financial reporting issue, or (ii) any matter that was either the subject of a "disagreement," as defined in Item 304(a)(1)(iv) of Regulation S-K, or a "reportable event," as defined in Item 304(a)(1)(v) of Regulation S-K. About Galaxy Next Generation Headquartered in Toccoa, Georgia, Galaxy Next Generation, Inc. -- http://www.galaxynext.us-- is a manufacturer and distributor of interactive learning technologies and enhanced audio solutions. It develops both hardware and software that allows the presenter and participant to engage in a fully collaborative instructional environment. Galaxy Next reported a net loss of $6.25 million for the year ended June 30, 2022, compared to a net loss of $24.43 million for the year ended June 30, 2021. As of Dec. 31, 2022, the Company had $4.76 million in total assets, $9.73 million in total liabilities, and a total stockholders' deficit of $4.97 million. Indianapolis, Indiana-based Somerset CPAs PC, the Company's auditor since 2018, issued a "going concern" qualification in its report dated Sept. 23, 2022, citing that the Company has suffered recurring losses from operations, recurring negative operating cash flows and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. GARCIA GRAIN: Seeks Cash Collateral Access ------------------------------------------ Garcia Grain Trading Corporation asks the U.S. Bankruptcy Court for the Southern District of Texas, McAllen Division, for authority to, among other thing, use cash collateral along with surplus funds held in a PACA Reserve Account. The Debtor seeks supplemental use of cash collateral subject to security interests asserted by Vantage Bank Texas against the Debtor's inventory of edible beans, accounts receivable and cash deposits derived from those products. The Debtor also intends to use surplus funds now held in the Debtor-in-Possession PACA Reserve Account. It also seeks authority to take advances for payment of sunflower seeds to be delivered to Industry Aceites Especiales S.A. De C.V. pursuant to a pre-petition supply contract. The advances will be used to pay farmers in the Rio Grande Valley of Texas for their sunflower seeds which they have contracted for sale to the Debtor, and which are projected to be harvested in June and July 2023. The Debtor requires the use of cash collateral to pay post-petition wages of the employees of the Debtor as well as the normal day-to-day expenses of its operations. The Debtor is currently not buying or selling any grain due to the suspension of its licenses by the Texas Department of Agriculture, which sealed the Progreso facility and Donna/Santa Rosa, along with a grain elevator facility the Debtor owns in Edcouch, Texas. The TDA requires that storage facilities dealing with feed grains such as corn, milo, and soybeans to be licensed. However, there are no requirements for the storage associated with the purchase and sale of oilseeds such as sunflower seeds or edible beans such as black and pinto beans. These commodities can be properly handled by the Debtor through the utilization of its flat storage at its Progreso facility and at Donna/Santa Rosa and can be moved from these facilities to its customers in Mexico. On the Petition Date, Vantage held title to or a security interest in certain grain inventory, machinery and equipment, and other personal property assets located at the Debtor's grain elevator facilities located in Santa Rosa and Donna, Texas, and asserts title to or a security interest in any grain currently located at the Progreso facility that in the ordinary course of Debtor's business was relocated from Santa Rosa/Donna to the Progreso facility in preparation for its export and sale to the Debtor's customers in Mexico. Vantage also asserts title to or a security interest in grain warehouse receipts associated with the grain inventory at Donna/Santa Rosa, along with any associated cash, accounts receivable, and other proceeds from the sale of the grain at such facilities. Vantage claims its collateral interest in such assets of the Debtor to secure the repayment of indebtedness represented by promissory notes executed by the Debtor having an estimated current outstanding balance of $9.1 million. Further, Vantage asserts a security interest against the Debtor's inventory of edible beans stored at the Donna/Santa Rosa facility along with the accounts receivable and cash deposits derived from the sale of the bean inventory. Currently, the Debtor estimates the total value of the bean inventory, accounts receivable and cash deposits to equal approximately $1.6 million. There are competing claims to these assets by the beans suppliers, which may claim superior rights and interests in them by virtue of the provisions of 11 U.S.C. sections 499(c), et. seq. Vantage also claims a security interest in the Debtor's existing contract rights related to the purchase of sunflower seeds from the farmers with whom it has production contracts as well as the supply contract related to the sale and delivery of the oilseeds to Industry Aceites. The value of these contracts cannot be realized without approval of the Debtor's request to perform them and its use of the funds derived from them as cash collateral as is sought in the Motion. In addition to its asserted ownership and security interest against the personal property of the Debtor, Vantage holds deeds of trust against real property of the Debtor known as the Pitts Property valued at an estimated $4.960 million; Donna/Santa Rosa having a combined estimated value of $3.5 million; and the Toluca Ranch titled in a separate entity named Garcia Balli, LLC having an estimated value of $1.7 million -- altogether having an estimated total collateral value of $10.2 million. Therefore, when the total value of the personal property collateral in the form of its claims against the Grain sold from the Progreso facility, the asserted security interest against the bean inventory, the accounts receivable and the cash deposits estimated at $1.800 million, and the liens Vantage claims against the Debtor's and its related entities' real estate valued at $10.2 million, the total collateral value of the bank exceeds $12 million compared to its total indebtedness of $9.1 million. The Debtor currently owns an inventory of edible pinto and black beans which is stored at the Donna/Santa Rosa facility having an estimated value of $400,000. In addition, it has collected accounts receivable from customers in Mexico of approximately another $700,000 which has been deposited in the Debtor in Possession PACA Reserve Account. Estimated receivables to be collected total $500,000. The Debtor has recently obtained an order from the Court establishing procedures for the Court to determine the nature, extent, and validity of any claims of bean suppliers under the provisions of PACA. The Debtor estimates the valid PACA claims, if any, to be less than $300,000. Thus, the Debtor believes there are surplus funds in the PACA Reserve Account of approximately $400,000 -- plus additional value in the existing bean inventory of another $400,000, plus estimated collectable receivables of $500,000. In accord with the provisions of the order establishing the PACA procedures, the deadline for filing the proof of claim forms for suppliers claiming protection under PACA is May 15th. Therefore, the amount of possible PACA claims will be established by such date, the Debtor seeks authority to use funds not necessary to satisfy the trust provisions of PACA as cash collateral. The Debtor also requests that the Court conduct a hearing on the matter on May 11, 2023 at 3:30 p.m. A copy of the Debtor's motion and budget is available at https://bit.ly/3LuJupL from PacerMonitor.com. The Debtor projects total operating expenses, on a monthly basis, as follows: $34,198 for May 2023; $34,198 for June 2023; $34,198 for July 2023; $34,198 for August 2023; and $34,198 for September 2023. About Garcia Grain Trading Corp. Garcia Grain Trading Corp.'s line of business includes buying or marketing grain, dry beans, soybeans, and inedible beans. Garcia Grain sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-70028) on February 17, 2023. In the petition signed by Octavio Garcia, its CEO and president, the Debtor disclosed up to $50 million in both assets and liabilities. Judge Eduardo V. Rodriguez oversees the case. David R. Langston, Esq., at Mullin Hoard & Brown, LLP, represents the Debtor as legal counsel. GHX ULTIMATE: Moody's Rates First Lien Loans 'B2', Outlook Stable ----------------------------------------------------------------- Moody's Investors Service affirmed GHX Ultimate Parent Corporation's B3 corporate family rating and the B3-PD probability of default rating. In the same action, Moody's assigned B2 ratings to GHX's amended and extended senior secured first lien revolving credit facility and its senior secured first lien term loan B. The senior secured first lien revolving credit facility will be upsized to $125 million from $50 million and will be extended to June 2027 from June 2024. The senior secured first lien term loan B was upsized to $725 million from $700 million and the maturity was extended to June 2027 from June 2024. The outlook remains stable. "The affirmation reflects Moody's expectation that GHX's financial leverage will improve with costs declining and that the refinancing transaction eliminates refinancing risk," said Jason Mercer, Vice President at Moody's. Assignments: Issuer: GHX Ultimate Parent Corporation Backed Senior Secured 1st Lien Term Loan B, Assigned B2 Backed Senior Secured 1st Lien Revolving Credit Facility, Assigned B2 Affirmations: Issuer: GHX Ultimate Parent Corporation Corporate Family Rating, Affirmed B3 Probability of Default Rating, Affirmed B3-PD Outlook Actions: Issuer: GHX Ultimate Parent Corporation Outlook, Remains Stable RATINGS RATIONALE GHX's CFR is constrained by: (1) high Moody's-adjusted leverage of 11.6x at year-end 2022, reducing to about 7.5x by year-end 2023 under a cost improvement program; (2) an aggressive financial policy and acquisition strategy under private equity ownership, including the potential for additional debt-funded transactions; and (3) the company's small scale (revenue of about $350 million in 2022) and niche focus on software-based supply chain solutions primarily to US-based hospitals and their suppliers. The rating benefits from: (1) a highly visible subscription-based revenue stream (about 90% of revenues) with the majority tied to multiyear contracts with embedded annual price increases and sustained renewal rates in excess of 95%; (2) its entrenched competitive position as a leading US healthcare exchange connecting about two-thirds of hospitals in the US to suppliers; and (3) the critical nature of its healthcare exchange and supply chain solutions; and (4) good liquidity underpinned by its sizable revolving credit facility. GHX's ESG credit impact score is highly negative (CIS-4) reflecting governance risks including aggressive financial policies such as elevated financial leverage and debt funded acquisitions. The stable outlook reflects Moody's expectation for the maintenance of good liquidity, steady top line growth, cost reductions and leverage improving towards 7.5x by year-end 2023. GHX has good liquidity with total sources of about $170 million versus $7 million of scheduled debt amortizations over the next 12 months. Liquidity sources consist of $20 million in cash on hand as of December 2022, a $125 million undrawn revolver (pro forma for the announced upsizing refinancing) expiring June 2027, and Moody's expectation of about breakeven free cash flow through 2023. The revolver has a springing net first lien leverage ratio of 7.75x when drawings exceed 35% of total borrowing capacity, with which GHX would remain comfortably in compliance if drawn. We do not expect the company to utilize the revolver. The company has limited ability to generate liquidity from asset sales. The $125 million senior secured first lien revolver and $725 million senior secured first lien term loan (both due June 2027) are rated B2, one notch above the B3 CFR. This reflects their senior position in the capital structure and the loss absorption provided by a $240 million second lien term loan due 2028 (unrated). FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if EBITA to interest drops below 1.0x, liquidity weakens (including if the company generates negative free cash flow on a sustained basis) or if financial policies become more aggressive. The ratings could also be downgraded should GHX fail to refinance its senior credit facilities. The ratings could be upgraded if GHX demonstrates a material growth in revenues and profitability, with free cash flow to debt sustained above 5% and debt to EBITDA maintained below 6.5x. GHX, headquartered in Louisville, CO, is a leading North American provider of software-as-a-service (SaaS) based supply chain automation solutions to the healthcare industry, facilitating B2B transactions between suppliers, providers and distributors. Temasek, Thoma Bravo and Ares own the majority of the equity interest in GHX. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. GHX ULTIMATE: S&P Downgrades ICR to 'B-', Outlook Stable -------------------------------------------------------- S&P Global Rating lowered its issuer credit rating on GHX Ultimate Parent Corp. to 'B-' from 'B' and its issue-level rating on its senior secured credit facility to 'B-' from 'B'. The recovery ratings are unchanged at '3'. S&P assigned its 'B-' issue level rating and '3' recovery rating to the company proposed $725 million term loan due 2027 and $125 million revolver due 2027. S&P said, "The stable outlook reflects our expectation that revenue will grow in the mid- to high-single-digit percent area organically for the next 12 months, mostly due to cross-sell additional services. While we believe leverage will stay elevated, we expect EBITDA and cash flow to grow from revenue growth and cost optimization, with S&P Global Ratings-adjusted margins stabilizing at about 28%." GHX is refinancing its first-lien term loan due 2024 with a new $725 million term loan due 2027, as well as upsizing the revolver balance to $125 million. It also recently announced the acquisition of Prodigo Solutions Inc., a supply chain and data enablement technology company. S&P believes the acquisition does not fundamentally change the company's business risk profile and contributes limited revenue and EBITDA to the company in the near term. S&P said, "The downgrade reflects our expectation that GHX will sustain S&P Global Ratings-adjusted leverage of about 9x and a free-operating cash flow (FOCF) deficit in 2023. The company reported FOCF deficit of less than $10 million in 2022 compared with our prior forecast of more than $30 million. The decrease was due to rising interest rates, system investments, inflation, and transaction expenses. We now anticipate about a $15 million-$20 million cash flow deficit in 2023 burdened by approximately $25 million in fees and expenses associated with the term loan refinancing transaction. Higher SOFR benchmark interest rates and higher margin on the proposed refinanced term loan will further erode cash flows compared with prior years. However, cost reduction initiatives by the company partly offset these negative drivers. "We expect GHX's free cash flow to improve in 2024. With fewer one-time costs and continued, albeit somewhat slower, revenue growth, we believe free cash flow for 2024 will rebound to about $20 million. Synergies from acquisitions will benefit EBITDA and cash flow. However, a consistently strong labor market that drives further wage growth and the company's continued investment in operating expenses to support future growth, could pressure EBITDA and cash flow. We forecast the company's pace of organic revenue growth in the mid- to high-single-digit percent area for 2024 (mostly from cross-selling activities) as hospital volume normalizes. "Inability to refinance debt could pose downside risks for the rating. The rating and stable outlook reflects our expectation that the proposed $725 million term loan and upsized revolver will successfully close, extending GHX's 2024 maturities to 2027. We also expect the company will use the proceeds to repay its existing $700 million first-lien term loan and cover fees and expenses. If the company cannot refinance, or refinances at terms materially worse than our assumptions on the term loan, it could pose a downside risk to our rating and outlook." GHX's aggressive growth strategy will likely keep leverage elevated in the coming years. The company remained acquisitive during the pandemic and issued over $250 million of debt, along with a common equity contribution, to redeem its preferred shares and fund acquisitions. Some of the acquisitions, such as Syft, have little revenue and EBITDA contribution and are still in the early stages of realizing full revenue synergies. The company has demonstrated willingness to at least partially fund these acquisitions with equity. In April 2023, the company announced the acquisition of Prodigo Solutions Inc. and we expect the acquisition to be funded by sponsor equity. S&P expects the company will remain acquisitive to grow outside of its core exchange business, and acquisitions will likely cause one-time transaction expenses to recur frequently and keep leverage elevated. This includes potentially using the upsized revolver or second-lien delayed draw term loan for modest-sized acquisitions. GHX has an entrenched position in a specialized niche with relatively small scale. GHX generates the majority of its revenue from the cloud-based exchange where health care providers, manufacturers, and distributors can transact and collaborate. GHX is currently the largest player in this space used by hospitals, covering 85%-90% of total hospital beds in the U.S. However, it is a niche market, leaving the company vulnerable to market changes. Currently, because of the low standardization of product identification and prices, exchange providers must have access to a large set of proprietary data to have a competitive offering. However, a standardization of product information, more transparency on pricing, consolidation among group purchasing organizations, or other shifts in the supply chain or technology could change this. For example, Amazon has begun selling medical supplies. GHX expanded into payment, inventory management, and sales rep training services via recent acquisitions, but the overall company is still very small in scale, with less than $350 million revenue in 2022. However, its diverse set of customers (its top 10 providers represented only about 15% of total revenue and top 10 suppliers represented about 40%) somewhat offsets the small scale. Furthermore, its core exchange service contracts are multiyear subscription based and provide high visibility to revenue (over 90% revenue visibility for 2023) along with over 95% retention rates. S&P said, "The stable outlook reflects our expectation that the company's revenue will grow organically in the mid- to high-single-digit percent area for 2023 and 2024. We also expect it will exhibit modest EBITDA margin growth such that it generates positive cash flow excluding one-time transactions and other costs." S&P could revise the outlook or rating if: -- The company cannot refinance upcoming maturities or the refinancing closing terms are materially worse than expected; or -- Longer-term operating challenges result in the company generating minimal or negative FOCF. S&P could raise the rating if we see evidence of FOCF to debt sustained above 3% supported by the solid execution of GHX's growth plans. 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 GHX. Our highly leveraged assessment of the company's financial risk profile reflects its corporate decision-making that prioritizes the interests of its controlling owners, which is in line with our view of the majority of rated entities owned by private-equity sponsors. Our assessment also reflects private-equity owners' generally finite holding periods and focus on maximizing shareholder returns." GLENS FALLS: Case Summary & 14 Unsecured Creditors -------------------------------------------------- Debtor: Glens Falls Re Holdings Inc. 1510 Central Avenue, Suite 380 Albany, NY 12205 Chapter 11 Petition Date: April 25, 2023 Court: United States Bankruptcy Court Northern District of New York Case No.: 23-10416 Debtor's Counsel: Opal F. Hinds, Esq. LAW OFFICE OF OPAL F. HINDS 650 Franklin Street, Suite 501 Schenectady, NY Tel: 518-893-8100 Email: opalhinds@1sthindslaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Stephen Frank as president. A full-text copy of the petition containing, among other items, a list of the Debtor's 14 unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/FTQDRUA/Glens_Falls_Re_Holdings_Inc__nynbke-23-10416__0001.0.pdf?mcid=tGE4TAMA GOLDEN KEY: Taps Aiken Warner Leonard as Accounting Consultant -------------------------------------------------------------- Golden Key Group, LLC seeks approval from the U.S. Bankruptcy Court for the District of Maryland to hire Aiken Warner Leonard, PLLC as its accounting consultant. The firm's services include: (a) rendering tax compliance and tax consulting services to the Debtor; (b) providing accounting support services; (c) consulting with the Debtor and its legal counsel in connection with other business matters relating to the Debtor's financial condition and projections; (d) providing expert testimony as required; (e) working with other financial consultants, if any; (f) assisting with such other tax and financial matters as the Debtor may request from time to time; and (g) providing accounting advice to the Debtor when needed in order to assume the continued accuracy of its internal accounting records and proposed Chapter 11 plan of reorganization. Aiken will charge these fees: a. $5,100 for the preparation of the Debtor's federal corporate income tax returns; b. $3,000 ($750 per state) for the Debtor's state corporate income tax returns for Alabama, District of Columbia, Maryland and Virginia, along with composite tax returns for the year ending Dec. 31, 2022; c. Hourly rates ranging from $100 to $400 per hour, with John Leonard, the Debtor's primary contact, billing at $400 per hour for general accounting support, bankruptcy, financial forensics, or valuations services. Mr. Leonard, a certified public accountant and member of Aiken, disclosed in a court filing that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: John S. Leonard, CPA Aiken Warner Leonard, PLLC 3975 University Drive, Suite 200 Fairfax, VA 22030 Phone: 703-591-1040 Fax: 703-591-1099 Email: jleonard@aikencopc.com About Golden Key Group Golden Key Group, LLC is a professional services firm dedicated to helping federal and commercial clients solve today's strategic, organizational and operational challenges while addressing their future needs. Founded in 2002, Golden Key Group's solution offerings include Human Capital Management Support, Human Resources Operations, Employee Training and Leadership Development, Professional Consulting Services, Program Management Office, Acquisition and Category Management, Analytics and Information Technology, Executive Search Services, and Select Solutions. The company is based in Landover, Md. Golden Key Group filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case No. 23-10414) on Jan. 20, 2023, with 1 million to $10 million in assets and $10 million to $50 million in liabilities. Gretchen McCracken, Golden Key Group's chief executive officer and managing member, signed the petition. Judge Maria Ellena Chavez-Ruark oversees the case. The Debtor tapped Paul Sweeney, Esq., at YVS Law, LLC as bankruptcy counsel; SouthBank Legal and Fox Rothschild, LLP as special counsels; and Aiken Warner Leonard, PLLC as accounting consultant. John Fitzgerald, III, Acting U.S. Trustee for Region 4, appointed an official committee to represent unsecured creditors in the Debtor's Chapter 11 case. The committee tapped Whiteford Taylor & Preston, LLP as legal counsel; SC&H Group as financial advisor; and SC&H Capital as investment banker. GREEN PROPERTY: Files for Chapter 11 to Stop Foreclosure -------------------------------------------------------- Green Property Management LLC filed for chapter 11 protection in the Eastern District of New York. The Debtor owns and rents a commercial multi-family real property located at 203 Harvard Street, Hempstead, New York 11550. The Debtor is filing a voluntary petition under Chapter 11 of the Bankruptcy Code due to a pending foreclosure sale creditor of the Real Property. The foreclosure sale was initiated by Nationstar Mortgage, LLC. A meeting of creditors under 11 U.S.C. Section 341(a) is slated for May 3, 2023 at 3:00 p.m. About Green Property Management Green Property Management LLC owns a property located at 203 Harvard Street Hempstead, New York valued at $680,000. Green Property Management LLC filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 23-71225) on April 11, 2023. In the petition filed by Desmond D'Souza, as member, the Debtor reported total assets of $695,107 and total liabilities of $1,082,731. The petition states that funds will be available to unsecured creditors. The case is overseen by Honorable Bankruptcy Judge Louis A Scarcella. Ronald J. Friedman has been appointed as Subchapter V trustee. The Debtor is represented by: Gus Michael Farinella, Esq. Law Offices of Gus Michael Farinella PC 803 Bellmore Avenue East Meadow, NY 11554 Tel: (212) 675-6161 Fax: (212) 675-4367 Email: gmf@lawgmf.com GUARDIAN FUND: Chapter 11 Case Consolidated With Involuntary ------------------------------------------------------------ Guardian Fund LLC filed for chapter 11 protection in the District of Nevada. The Debtor's business consists of buying, selling, and managing rental properties primarily in Ohio, Missouri and Alabama. The Debtor owns 300 real properties and manages 1,500 additional properties for its members under certain lease agreements. The Debtor also owns 100% interests in various subsidiary companies that also own or manage real properties. The Debtor has 750 unsecured creditors and equity holders. On March 17, 2023, certain petitioning creditors filed against Guardian a Chapter 7 involuntary petition (Bankr. D. Nev. Case No. 23-50117). On April 11, 2023, the Debtor filed a Chapter 11 voluntary petition (Case No. 23-50233). The Debtor's commencement of the Chapter 11 case constitutes an order for relief under Chapter 11 of the Bankruptcy Code. On April 17, 2023, the Debtor and the petitioning creditors filed (in the Chapter 11 case and involuntary Chapter 7 case) a stipulation seeking to consolidate both cases under the first-filed case, 23-50177. The stipulation also sets the Chapter 11 petition date to March 17, 2023. A meeting of creditors under 11 U.S.C. Section 341(a) is slated for May 15, 2023. About Guardian Fund LLC Guardian Fund LLC is a limited liability company in Nevada. Guardian Fund LLC filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No. 23-50233) on April 12, 2023. In the petition filed by Aaron Noe, president, El Monte Capital, Inc., manager, the Debtor reported assets between $10 million and $50 million and liabilities between $50 million and $100 million. The petition states that funds will be available to unsecured creditors. Bankruptcy Judge Natalie M Cox oversees the case. The Debtor is represented by: Norma Guariglia, Esq. HARRIS LAW PRACTICE LLC 5440 LOUIE LANE, SUITE 106 RENO, NV 89511 Tel: 775-786-7600 Fax: 775-786-7764 Email: norma@harrislawreno.com H-CYTE INC: Sells $135K Convertible Promissory Notes to 3 Investors ------------------------------------------------------------------- H-Cyte, Inc. and three investors entered into a Securities Purchase Agreement whereby the Company sold and issued to the investors an aggregate of $135,000 of the Company's convertible promissory notes, which are convertible into the Company's Common Stock, $0.001 par value, par value $0.001. In connection with the aforementioned Notes, the Company also issued to the investors a warrant to purchase a certain number of shares of Common Stock, which are equal to 20% of the shares of Common Stock issuable upon conversion of the Note, based on a price of $2.00 per share. These warrants have a term of five years, with an exercise price of $2.00 per share. Unless the Company chooses to terminate earlier, the offering and the sale of the Notes shall terminate on the sooner of the sale of the maximum offering amount or April 30, 2023. However, the Company has the option to extend this offering to June 30, 2023. $100,000 of the Notes have a maturity date of the earlier of (i) one year from issuance; or (ii) upon the closing of a qualified offering. The other $35,000 of the Notes has a maturity date 60 days from issuance. Interest on the Note shall accrue on the unpaid principal balance of this Note at the rate of eight percent per annum, and will be calculated on an actual/365-day basis. In the event that the Company moves forward with a qualified offering, as referenced in the SPA, the Holder may convert the unpaid and outstanding principal plus any accrued and unpaid Interest into shares of the Company's Common Stock at a conversion price equal to a 20% discount to the offering price. Further, in connection with the SPA, the Company also issued a Common Stock Purchase Warrant to certain investors, which are exercisable on or prior to the close of business on the five year anniversary of the initial exercise date, to purchase up to a certain amount of shares of Common Stock, with 20% of the shares of Common Stock issuable upon conversion of the Convertible Promissory Note purchased by the Holder, pursuant to the SPA between the Holder and the Company. The Company issued Warrants to purchase an aggregate of 13,500 shares of Common Stock. The exercise price per share of the Common Stock under this Warrant is $2.00. About H-CYTE Inc. Headquartered in Tampa, Florida, H-CYTE Inc. -- http://www.HCYTE.com-- is a hybrid-biopharmaceutical company dedicated to developing and delivering new treatments for patients with chronic respiratory and pulmonary disorders. H-Cyte reported a net loss of $4.80 million for the year ended Dec. 31, 2021, compared to a net loss of $6.46 million on $2.15 million of revenues for the year ended Dec. 31, 2020. As of Sept. 30, 2022, the Company had $240,559 in total assets, $8.39 million in total liabilities, and a total stockholders' deficit of $8.15 million. Tampa, Florida-based Frazier & Deeter, LLC, the Company's auditor since 2018, issued a "going concern" qualification in its report dated Feb. 25, 2022, citing that he Company has negative working capital, has an accumulated deficit, has a history of significant operating losses and has a history of negative operating cash flow. These factors raise substantial doubt about the Company's ability to continue as a going concern. HAWTHORNE HANGAR: Seeks Approval to Hire Real Estate Brokers ------------------------------------------------------------ Hawthorne Hangar Operations L.P. seeks approval from the U.S. Bankruptcy Court for the Central District of California to hire real estate brokers to market for sale its airplane hangar facility at the Hawthorne Airport in California. The real estate brokers include Lee Alice Johnson of Berkshire Hathaway HomeServices, Matthew Palumbo of EXP Commercial and Evangelo Karantonis. The brokers will get a commission equal to 5 percent of the sales price. In court papers, the brokers disclosed that they are "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code. The brokers can be reached at: Lee Johnson Berkshire Hathaway HomeServices 2216 Main Street, Suite 201 Santa Monica, CA 90405 Phone: (310) 892-2244 Email: lee@leejohnsonre.com -- and -- Matthew Palumbo EXP Commercial 2260 N. Beachwood Drive Los Angeles, CA 90068 Cell: (310) 402-4254 Email: matthew.palumbo@expcommercial.com -- and -- Evangelo Karantonis 3857 Birch Street, Suite 307 Newport Beach, CA 92660 Cell: (949) 444-1716 Email: evangelo.karantonis@gmail.com About Hawthorne Hangar Operations Hawthorne Hangar Operations, LP -- https://www.hawthornehangarops.com -- is the owner of a large airplane hangar facility at Hawthorne Airport located at 3507 Jack Northrop Ave., Hawthorne, Calif. It provides hangar space, fuel, maintenance and repairs for small plane aircraft. Its principal owner is Dan Wolfe, either directly with his wife or through the Wolfe Family Trust of 1992. Hawthorne Hangar Operations sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Calif. Case No. 23-11789) on March 26, 2023. In the petition signed by Dan Wolfe, general partner, the Debtor disclosed $10 million to $50 million in both assets and liabilities. Judge Barry Russell oversees the case. Gonzalez & Gonzalez Law, PC serves as the Debtor's bankruptcy counsel. HOT'Z POWER WASH: Seeks to Hire Elna Tax Services as Accountant --------------------------------------------------------------- Hot'z Power Wash, Inc. seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire Elna Tax Services, Inc. as its accountant. The Debtor requires an accountant to prepare tax returns and provide monthly payroll, accounting and financial services. The firm will bill $800 per month for its services. As disclosed in court filings, Elna is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Waleed Elnaggar Elna Tax Services, Inc. 12033 Veterans Memorial Dr # 115 Houston, TX 77067 Phone: 281-918-1855 Email: elmatax@yahoo.com About Hot'z Power Wash Hot'z Power Wash, Inc. is a pressure washing company that specializes in restaurant kitchen exhaust systems. The company has been in business for over 10 years. Hot'z Power Wash sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas Case No. 23-30749) on March 5, 2023, with up to $100,000 in both assets and liabilities. James Finney, president of Hot'z Power Wash, signed the petition. Judge Eduardo V. Rodriguez oversees the case. The Debtor tapped Reese Baker, Esq., at Baker & Associates as legal counsel and Elna Tax Services, Inc. as accountant. HOWARD HUGHES: Moody's Lowers CFR to Ba3, Outlook Remains Stable ---------------------------------------------------------------- Moody's Investors Service downgraded The Howard Hughes Corporation's corporate family rating to Ba3 from Ba2 and Probability of Default Rating to Ba3-PD from Ba2-PD. Moody's also affirmed Howard Hughes' senior unsecured notes at Ba3. The company's Speculative Grade Liquidity rating was unchanged at SGL-3. The outlook is stable. "The ratings downgrade reflects Moody's expectations that Howard Hughes' will maintain significantly higher leverage and earnings will underperform over the next 18-24 months relative to Moody's initial expectations," said Griselda Bisono, Moody's Vice President-Analyst. "A combination of lower land sales due to reduced demand for single-family homes, increased debt to fund its large development portfolio and a lack of condo deliveries in 2023 will result in debt/book capitalization rising to 59% this year, from 55% at the end of 2022, and then decline to a still high 56% by the end of 2024," said Bisono. EBITDA / (interest expense + capitalized interest) will also weaken to 1.1x in 2023, from 3.0x at the end of 2022, before improving to 2.2x in 2024. The affirmation of Howard Hughes' senior unsecured notes, which are now in line with the CFR, reflects the company's sizable unencumbered asset base. Despite the presence of a considerable amount of secured project financing in the capital structure, the unsecured notes benefit from the company's valuable and low-cost basis land pool. The land pool is unencumbered and enhances recovery prospects in a default scenario. The stable outlook reflects Moody's expectations that Howard Hughes will deliver the Victoria Place condo building in Hawaii in 2024, which is 100% pre-sold, and that the master planned communities (MPC) land sale business will experience a modest recovery, with about 10% revenue growth in 2024. The stable outlook also reflects Moody's expectations that Howard Hughes will maintain adequate liquidity. Downgrades: Issuer: Howard Hughes Corporation (The) Corporate Family Rating, Downgraded to Ba3 from Ba2 Probability of Default Rating, Downgraded to Ba3-PD from Ba2-PD Affirmations: Issuer: Howard Hughes Corporation (The) Senior Unsecured Regular Bond/Debenture, Affirmed Ba3 Outlook Actions: Issuer: Howard Hughes Corporation (The) Outlook, Remains Stable RATINGS RATIONALE Howard Hughes' Ba3 CFR is supported by the company's robust gross margins, which are largely a result of the company's low cost basis in a large land pipeline that has been owned for two decades. Howard Hughes' steady development of real estate assets within its MPCs has meaningfully increased the value of its remaining land, while growing its portfolio of income-producing assets. In addition to the company's high debt leverage, the rating is constrained by the company's reliance on its Hawaii condo business, which while profitable and well sold, is also capital intensive and has a finite life of about 6-7 years once all condominium buildings in the project are built and delivered. Furthermore, the company's commercial real estate business, which consists of a portfolio of mostly office, retail and multifamily assets, is concentrated in three cities – Houston, TX, Las Vegas, NV and Columbia, MD. In particular, the company is operating in a more challenged operating environment for office landlords due to the impact that hybrid work has had on office demand. Howard Hughes does have increased vacancies and declines in same-store NOI from Q4 2021 to Q4 2022 across its office portfolio, which makes up over 45% of the company's total rentable square feet within its stabilized operating asset business. The speculative grade liquidity rating of SGL-3 reflects Moody's expectation of adequate liquidity for Howard Hughes over the next 12-18 months, which incorporates a reliance on external capital to cover capital expenditures. Moody's expects Howard Hughes to be free cash flow negative in 2023 and have access to $200 million of available capacity on a secured note. By Q2 2024 the company should begin receiving a large inflex of cash as units from the Victoria Place condo building are delivered, resulting in free cash flow of about $55 million by the end of 2024. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS A ratings upgrade would reflect debt to book capitalization below 50% and EBITDA to interest expense plus capitalized interest above 2.0x on a sustained basis. An upgrade would also require maintenance of good liquidity. The ratings could be downgraded should the company's debt to book capitalization increase above 60% and EBITDA to interest expense plus capitalized interest dips below 1.5x. A ratings downgrade could also occur should the company experience any deterioration in liquidity. The principal methodology used in these ratings was Homebuilding and Property Development published in October 2022. Headquartered in Houston, Texas, The Howard Hughes Corporation (NYSE: HHC) was formed in 2010 as a spin off from General Growth Properties. The company operates in four different segments: lot sales to homebuilders from its own master planned communities; rental and other income from developed mixed use properties (referred to as the Operating Assets segment); Strategic Developments, which include mixed use properties held for future development and redevelopment; and the Seaport, a waterfront multi-block district in New York City that is being converted into a mixed-use neighborhood. HOWMET AEROSPACE: S&P Alters Outlook to Pos., Affirms 'BB+' ICR --------------------------------------------------------------- S&P Global Ratings revised its outlook to positive from stable and affirmed its 'BB+' issuer credit rating on Howmet Aerospace Inc. The positive outlook reflects S&P's expectation that credit metrics will improve this year as robust demand for commercial aircrafts supports strong cash flow generation and the company prioritizes deleveraging. Commercial aerospace recovery drives Howmet Aerospace Inc.'s financial performance. S&P said, "We expect demand for the company's commercial aviation products, which are used in jet engines and aircraft structures and assembly, to remain strong in 2023 as orders outpace deliveries and aircraft and original equipment manufacturers (OEMs) work through backlogs. Supply-chain constraints continue to challenge the ability of plane makers to maintain stable production rates. We note, however, that Howmet can likely achieve our cash flow expectations for 2023 based on relatively modest monthly build rates, including 30 Boeing 737 MAX and 53 to 54 Airbus A320 family aircrafts, which approximate current levels. Domestic and regional air travel, which rely on narrowbody models such as the MAX and A320, has effectively recovered to pre-pandemic levels. Longer-distance travel, which employs widebody aircrafts such as Boeing's 787 and Airbus's A350, has taken longer to recover, but we expect the sector to further strengthen this year. We assume relatively modest widebody production of 30 787s and 70-80 A350 for the year. We expect higher volumes and cost containment will result in S&P Global Ratings-adjusted EBITDA margins improving to over 24% in 2023 from a low of 22.5% in 2020, supporting strong capacity for cash flow generation. We expect that these factors, coupled with moderate capital investment requirements, will allow the company to generate more than $600 million of free cash flow per year." S&P said, "We expect Howmet's financial policies to support improving credit measures. Howmet has a financial leverage target of debt to EBITDA of 1.5x-2.0x and reported leverage of 2.6x on Dec. 31, 2022. For comparison, leverage on a S&P Global Ratings-adjusted basis adjusted was 3.2x at year end. We anticipate credit measures to improve mainly from increasing profitability, though the company may engage in opportunistic debt reduction. Howmet made modest repurchases and redeemed $150 million of notes earlier this year and now has a $905 million maturity in October 2024 and $600 million maturity in 2025. We expect the company is likely to moderate share repurchases in the near term while prioritizing debt reduction, though buybacks are likely be a significant use of discretionary cash flow on an ongoing basis. Based on these assumptions, we estimate S&P Global Ratings-adjusted leverage of 2.5x-3.0x in 2023 and funds from operations (FFO) to debt of 26%-30%, improving gradually in 2024." Demand for Howmet's transportation and other industrial products will likely soften if economic activity slows. Commercial transportation and industrial products comprise approximately 35% of sales, and the company expects the truck market to weaken later this year. Howmet may perform somewhat better than the overall market due to the fuel efficiency advantage provided by lighter aluminum wheels. S&P said, "We also expect demand for the company's general industrial products to be sensitive to a potential economic slow down. While softness in these areas could constrain Howmet's growth, we estimate pent-up demand for new aircrafts as providing some cushion in the company's financial performance. Over the next two years, we also expect robust defense spending to support demand for Howmet's defense aerospace products, including components used in F-35 manufacturing, even if economic activity slows." S&P said, "The positive outlook reflects our expectation that Howmet's credit metrics will continue to improve as demand for aircrafts remains strong and build rates increase. We also anticipate robust defense spending and relatively stable demand in the company's other end markets will improve credit metrics . We expect FFO to debt to be between 26%-30% in 2023 and around 30% in 2024." S&P could raise the rating over the next 12-24 months if FFO to debt approaches 30% and S&P expects it to remain there. This would likely occur if: -- Aircraft build rates approach pre-pandemic levels, dependent on supply-chain stability and OEM production consistency; -- Margins withstand inflationary pressures; and -- Financial policy is consistent with our expectations and includes a restrained level of share repurchases that accommodates debt reduction. S&P could revise the outlook to stable in the next 12-24 months if FFO to debt remained in the low- to mid-20% area and S&P didn't expect it to improve. This would likely be the result of: -- Lower commercial aircraft production because of supply chain or other production constraints or weaker demand due to faltering economic conditions; -- Weaker-than-expected margins due to inflation, or supply chain or labor issues; or -- The company acting more aggressively with its financial policy than S&P expects. E-2, S-4, G-2 S&P said, "Social factors are a negative consideration in our credit rating analysis of Howmet. As a manufacturer of engine and structural components, with commercial aerospace representing about half of pre-pandemic revenue, Howmet's earnings and cash flows were materially affected by lower aircraft production, with sales down as much as 30%. We expect aircraft production volumes to continue to recover over the next two years and to approach pre-pandemic levels, which would be reflected in the social indicator. "Environmental factors are an overall neutral consideration for Howmet as we believe tightening emission standards for aircraft engines can be accommodated in the normal development cycle of new aircraft engines and will likely increase demand as airlines replace less efficient models." HUMANIGEN INC: Has Until August 21 to Regain Nasdaq Compliance -------------------------------------------------------------- Humanigen, Inc. disclosed in a Form 8-K filed with the Securities and Exchange Commission that it had been granted an extension until Aug. 21, 2023 to demonstrate compliance with all applicable requirements for listing of the Company's common stock on Nasdaq by the Nasdaq Hearings Panel, subject to the Company's compliance with the Panel's requirements for periodic updates relating to the status of the Company's progress against achievement of the compliance plan presented at the April 6, 2023 hearing with the Panel. There can be no assurance that the Company will be successful in its execution of its compliance plan or otherwise regain compliance with the applicable Nasdaq listing requirements within the extended compliance period. About Humanigen Inc. Based in Brisbane, Calif., Humanigen, Inc. (OTCQB: HGEN), formerly known as KaloBios Pharmaceuticals, Inc. -- http://www.humanigen.com -- is a clinical stage biopharmaceutical company, developing its portfolio of proprietary Humaneered anti-inflammatory immunology and immuno-oncology monoclonal antibodies. The Company's proprietary, patented Humaneered technology platform is a method for converting existing antibodies (typically murine) into engineered, high-affinity human antibodies designed for therapeutic use, particularly with acute and chronic conditions. The Company has developed or in-licensed targets or research antibodies, typically from academic institutions, and then applied its Humaneered technology to optimize them. The Company's lead product candidate, lenzilumab, and its other product candidate, ifabotuzumab ("iFab"), are Humaneered monoclonal antibodies. Its Humaneered antibodies are closer to human antibodies than chimeric or conventionally humanized antibodies and have a high affinity for their target. In addition, the Company believes its Humaneered antibodies offer further important advantages, such as high potency, a slow off-rate and a lower likelihood to induce an inappropriate immune response or infusion related reaction. Humanigen reported a net loss of $70.73 million for the 12 months ended Dec. 31, 2022, compared to a net loss of $236.65 million for the 12 months ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $11.19 million in total assets, $57.96 million in total liabilities, and a total stockholders' deficit of $46.76 million. Ridgeland, Mississippi-based HORNE LLP, the Company's auditor since 2016, issued a "going concern" qualification in its report dated March 30, 2023, citing that the Company has suffered recurring losses from operations and its total liabilities exceed its total assets. This raises substantial doubt about the Company's ability to continue as a going concern. IMAGEFIRST HOLDINGS: Moody's Rates New Sr. Secured Term Loans 'B3' ------------------------------------------------------------------ Moody's Investors Service assigned B3 rating to ImageFirst Holdings, LLC's proposed $100 million incremental first lien senior secured term loan due 2028 and $20 million delayed draw term loan due 2028. ImageFirst's other ratings remain unchanged, including its B3 corporate family rating, B3-PD probability of default rating and the B3 rating on the company's existing first lien senior secured credit facility (consisting of a $50 million revolver due 2026 and a $270 million term loan due 2028). The outlook remains stable. The net proceeds from the proposed $100 million senior secured term loan add-on will be used to repay outstanding revolver loans, fund acquisitions, including several that have already been identified, and add cash to the balance sheet. The delayed draw term loan availability expires in 24 months. Proceeds from the delayed draw term loan can be used to finance one or more permitted investments, to finance earn-outs to permitted investments, and to repay revolving loans that were used to fund permitted acquisitions. The proposed secured term loans will constitute a separate class of loans and be non-fungible with the existing secured term loans. The anticipated interest rate on the add-on term loan is higher than for the existing secured term loans. RATINGS RATIONALE Moody's considers the proposed transaction a negative credit development because the repricing of the existing term loans and incremental interest expense on the proposed term loans will further strain the company's already limited free cash flow profile and the additional loan increases debt leverage. Moody's notes ImageFirst's debt capital structure is entirely comprised of floating rate debt. On a pro forma basis for the new add-on, the company's debt-to-EBITDA (Moody' adjusted) will increase marginally from 4.5 times to 4.9 times as of March 31, 2023. However, the transaction provides incremental liquidity, which helps balance Moody's concerns with respect to low or negative free cash flow generation over the next 12-15 months. Moody's projects the company's 2023 free cash flow (before mandatory debt amortization) to be breakeven due to higher capex and working capital needs. As of March 31, 2023, pro forma for the transaction, ImageFirst will have approximately $24.2 million of balance sheet cash and full availability under its $50 million revolving credit facility due 2026, which will provide sufficient liquidity to service approximately $3.7 million of required annual amortization payments due under the upsized secured term loans. The stable outlook reflects Moody's anticipation for continued strong topline growth both organically and through acquisitions over the next 12-18 months. Moody's also expects that the company will maintain adequate liquidity over the same period. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if the company were able to generate consistently positive free cash flow on annual basis and sustain growth in revenue and earnings, while maintaining its debt-to-EBITDA (Moody's adjusted) below 5.5 times. Free cash flow-to-gross debt (Moody's adjusted) of at least 5% would also be supportive for an upgrade. Moody's could downgrade the ratings if debt-to-EBITDA (Moody's adjusted) rises above 6.5x or revenue and profitability growth are materially lower than projected. Sustained cash flow deficits, a growing reliance on revolver borrowings, or other factors that limit liquidity would create downward rating pressure. Assignments: Issuer: ImageFirst Holdings, LLC Senior Secured 1st Lien Term Loan B, Assigned B3 Senior Secured 1st Lien Delayed Draw Term Loan, Assigned B3 ImageFirst, headquartered in King of Prussia, PA and controlled by affiliates of private equity sponsor Calera Capital Advisors L.P., is a national provider of outsourced healthcare laundry and textile rental services largely to the outpatient and specialty healthcare market in the United States. Moody's expects the company will generate pro forma revenue in excess of $600 million in 2023. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. INTEGRATED VENTURES: Effects Reverse Common Stock Split ------------------------------------------------------- Integrated Ventures, Inc. disclosed in a Form 8-K filed with the Securities and Exchange Commission it received from the Secretary of State of the State of Nevada the filed Certificate of Change Pursuant to NRS 78.209 , which effected a 1-for-125 reverse stock split and reduction in the number of shares of Common Stock that the Company is authorized to issue at the same ratio, with such number of authorized shares of Common Stock reduced from 750 million to six million. The Company subsequently filed a Certificate of Correction to the Certificate of Change to correct an inaccurate reference to the change in the number of shares of Series A Preferred Stock and Series B Preferred Stock, when only the number of shares of Common Stock was to be changed pursuant to the Certificate of Change. The Financial Industry Regulatory Authority (FINRA) has effected the Reverse Stock Split in the marketplace on April 21, 2023. Effective April 21, 2023, as a result of the Reverse Stock Split, each 125 shares of the Company's common stock outstanding automatically converted into one share of common stock. No fractional shares will be issued in connection with the Reverse Split. Instead, any fractional share resulting from the Reverse Split will be rounded up to the next largest whole share. The Company's shares will continue to trade on the OTC Marketplace under the symbol "INTV" with the letter "D" added to the end of the trading symbol for a period of 20 trading days to indicate that the Reverse Stock Split has occurred. The Reverse Stock Split has no impact on shareholders' proportionate equity interests or voting rights in the Company or the par value of the Company's common stock, which remains unchanged. About Integrated Ventures Inc. Integrated Ventures Inc. -- www.integratedventuresinc.com -- focuses on acquiring, launching, and operating companies in the cryptocurrency sector, mainly in digital currency mining, equipment manufacturing, and sales of branded mining rigs, as well as blockchain software development. Integrated Ventures reported a net loss of $565,514 for the year ended June 30, 2022, compared to a net loss of $22.43 million for the year ended June 30, 2021. As of Sept. 30, 2022, the Company had $15.95 million in total assets, $1.96 million in total current liabilities, $1.12 million in series C preferred stock, $3 million in series D preferred stock, and $9.86 million in total stockholders' equity. Houston, Texas-based M&K CPAS, PLLC, the Company's auditor since 2018, issued a "going concern" qualification in its report dated Sept. 27, 2022, citing that the Company has suffered net losses from operations in current and prior periods and has accumulated deficiency, which raises substantial doubt about its ability to continue as a going concern. INTERMEDIA HOLDINGS: S&P Lowers ICR to 'CCC+', Outlook Stable ------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on U.S.-based cloud communications and collaboration provider Intermedia Holdings Inc. and its issue-level rating on its senior secured debt facilities to 'CCC+' from 'B-'. S&P said, "The stable outlook reflects our view that a debt restructuring or distressed exchange is unlikely within the next 12 months. However, we believe the company may need financial support from its sponsor MDP to fully repay the RCF before its maturity in October 2024. "We expect continued near-term reliance on the RCF with a high interest burden and organic growth investments resulting in negative FOCF in 2023. Although we expect S&P Global Ratings-adjusted EBITDA margins to improve to around 10% in 2023 as Intermedia slows down its investments in sales, marketing, and product development to focus more on profitability, we still expect negative FOCF of about $10 million as the company could face a high cash interest burden of above $30 million. As a result, we expect the RCF will need to be further drawn to a balance of about $30 million by the end of the year. This follows an $18 million draw on the facility as of December 2022 to fund negative FOCF even after $25 million of incremental bank funding guaranteed by MDP to boost liquidity last April. We therefore believe that Intermedia may need further support from its sponsor to meet the October 2024 RCF maturity since it may not generate sufficient FOCF in 2024 to fully pay down the facility. "We expect FOCF to improve in 2024 helped by EBITDA growth and the end of nonrecurring payments to NEC. With new partner recruitment and enablement continuing to drive unified communications as a service (UCaaS) product growth, we expect revenue growth to be maintained at 12%-14% in 2023 and 2024. We believe this should support an improvement in EBITDA margins to the low-teens percent area in 2024 with Intermedia continuing to manage its growth investments. In addition to the end of about $6 million of annual payments to NEC in 2023, we expect this to drive a return to positive FOCF in 2024 and EBITDA interest coverage improving to about 1.5x from about 1x in 2023. If the company can sustain positive FOCF and address its upcoming debt maturities, we could potentially revise our view on the sustainability of the company's capital structure. "The stable outlook reflects our view that a debt restructuring or distressed exchange is unlikely within the next 12 months. However, we believe Intermedia may need to receive financial support from its sponsor MDP to fully repay the RCF before its maturity in October 2024." S&P could lower its ratings if we believed Intermedia could undertake a debt restructuring or distressed exchange within a 12-month period. This could be due to our belief that: -- Intermedia would likely be unable to fully repay or extend the maturity on its RCF or term loan; or -- Greater-than-expected cash burn would result in a further weakened liquidity position, requiring an external capital infusion within the next 12 months. S&P could raise its ratings if: -- Intermedia significantly improved its liquidity position by successfully refinancing or extending its RCF maturity, or by fully paying down the facility through FOCF generation, a capital infusion or other form of support from MDP; and -- The company returns to sustained positive FOCF from consistent double-digit percent organic revenue growth and EBITDA margins improving well above 10%, resulting in reduced near-term reliance on debt to fund operating activities. 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 the company, as is the case for most rated entities owned by private-equity sponsors. We believe Intermedia Holdings Inc.'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." JDI DATA: Court Okays Appointment of Chapter 11 Trustee ------------------------------------------------------- Judge Scott Grossman of the U.S. Bankruptcy Court for the Southern District of Florida approved the appointment of Scott Brown, a partner at Bast Amron, LLP, as Chapter 11 trustee for JDi Data Corporation. The appointment comes upon the application filed by Mary Ida Townson, the U.S. Trustee for Region 21, to appoint a bankruptcy trustee to take over JDi Data's Chapter 11 case. Mr. Brown disclosed in a court filing that he is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Mr. Brown can be reached at: Scott N. Brown Bast Amron, LLP Sun Trust International Center One Southeast Third Avenue, Suite 2410 Miami, FL 33131 Phone: (786) 219-4059 Email: sbrown@bastamron.com A copy of the appointment order is available for free at https://bit.ly/3L4D2UW from PacerMonitor.com. About JDi Data Corporation JDi Data Corporation has developed innovative solutions for professionals within the insurance, risk, and legal communities. Its software solutions are designed to allow organizations to invest in tools that truly transform their day-to-day processes. The company is based in Fort Lauderdale, Fla. JDi Data sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-11322) on Feb. 17, 2022, with $1 million to $10 million in both assets and liabilities. John Heller, chief restructuring officer, signed the petition. Judge Scott M. Grossman oversees the case. Moffa & Bierman represents the Debtor as legal counsel. LANNETT CO: NYSE Suspends Trading, Starts Delisting Proceedings --------------------------------------------------------------- Lannett Company, Inc. announced it received a written notice from the New York Stock Exchange dated April 19, 2023, notifying the Company that it will commence proceedings to delist the Company's common stock from the NYSE. The NYSE reached this determination pursuant to Section 802.01B of the NYSE's Listed Company Manual because the Company has fallen below the NYSE's continued listing standard requiring listed companies to maintain an average global market capitalization of at least $15,000,000 over a consecutive 30-trading day period. The NYSE suspended trading in the Company's common stock immediately after market close on April 19, 2023. The NYSE will apply to the Securities and Exchange Commission to delist the common stock upon completion of all applicable procedures, including any appeal by the Company of the NYSE's decision. The Company does not expect to appeal the delisting. The Company continues to engage in active discussions with key secured creditors regarding a potential deleveraging transaction, as previously announced. While the Company cannot provide any assurance as to if or when it will consummate any such transactions or the terms of any such transactions, the Company expects to be able to reach an agreement with its key secured creditors in the near term on such a transaction. About Lannett Company Lannett Company, Inc., founded in 1942, develops, manufactures, packages, markets and distributes generic pharmaceutical products for a wide range of medical indications. For more information, visit the company's website at www.lannett.com. The Company reported a net loss of $231.62 million for fiscal year ended June 30, 2022, a net loss of $363.47 million for fiscal year ended June 30, 2021, and a net loss of $33.37 million for fiscal year ended June 30, 2020. As of Dec. 31, 2022, the Company had $438.36 million in total assets, $750.63 million in total liabilities, and a total stockholders' deficit of $312.27 million. * * * As reported by the TCR on April 10, 2023, S&P Global Ratings lowered its issuer credit rating to 'SD' (selective default) from 'CCC+' on Lannett Co. Inc. The downgrade reflects Lannett's failure to make the interest payment due on its convertible notes. In October 2022, Moody's Investors Service downgraded the ratings of Lannett Company, Inc., including the Corporate Family Rating to Ca from Caa1. The downgrade reflects Moody's expectation for continued deterioration in Lannett's operating performance, as base portfolio of oral generic drugs will continue to erode due to intense competitive pricing pressures. Given the forecast of negative EBITDA over the next year, Moody's views Lannett's debt levels as unsustainably high, and liquidity as weak, with the company continuing to burn through cash balance, well into fiscal year 2024. LEVINSON & SANTORO: Taps Kalina & Mattia as Special Counsel ----------------------------------------------------------- Levinson & Santoro Electric Corp. seeks approval from the U.S. Bankruptcy Court for the Eastern District of New York to hire Kalina & Mattia, P.C. as special counsel. The firm's services include: a. representing the Debtor in all construction law issues, including but not limited to, collecting construction receivables, and assisting in the analysis of New York Lien Law payables; b. advising the Debtor's bankruptcy counsel in connection with non-bankruptcy construction law legal issues related to the Chapter 11 case; c. advising the Debtor's accountant in connection with accounting matters related to construction law; d. assisting the Debtor's bankruptcy counsel in attempts to reach a consensual resolution of all disputes, including potentially through the court's mediation process; and e. representing the Debtor in construction law litigation, if necessary. Jeremy Kalina, Esq., at Kalina & Mattia disclosed in a court filing that his firm is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Jeremy Kalina, Esq. Kalina & Mattia, P.C. 80 Crossways Park Drive Suite 300, Woodbury, NY 11797 Phone: 516-247-6445 Fax: 516-682-2026 Email: jk@kalinamattialaw.com About Levinson & Santoro Electric Corp. Levinson & Santoro Electric Corp. is a New York-based provider of electrical work and services. Levinson & Santoro filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 22-42814) on Nov. 9, 2022, with between $50,000 and $100,000 in assets and between $1 million and $10 million in liabilities. Fred Levinson, president of Levinson & Santoro, signed the petition. Judge Nancy Hershey Lord presides over the case. The Debtor tapped Dawn Kirby, Esq., at Kirby Aisner & Curley, LLP as bankruptcy counsel and Kalina & Mattia, P.C. as special counsel. LTL MANAGEMENT: Johnson & Johnson Wins Baby Power Trials Pause -------------------------------------------------------------- Steven Church and Jonathan Randles of Bloomberg News report that Johnson & Johnson must face new lawsuits accusing the company of selling tainted baby powder that caused cancer, a judge ruled, opening the company up to court actions that had been halted for 19 months. US Bankruptcy Judge Michael Kaplan said Thursday, April 20, 2023, the company won't have to go to trial over any talc lawsuits for at least 60 days, but new lawsuits can be filed. Kaplan also said lawyers suing on behalf of tens of thousands of people can begin preparing their cases for the first time since late 2021. The limited pause is in trials is designed to give J&J's bankrupt unit, LTL Management, time to try to win court approval of an $8.9 billion settlement. Kaplan's pause is narrower than the one sought by J&J. Lawyers for J&J’s bankrupt unit tried to convince Kaplan to block all the baby powder lawsuits from going forward, just as he did after J&J first put the company into bankruptcy in 2021. That bankruptcy was dismissed earlier this month. Kaplan said he is "skeptical" of J&J's effort to revive its strategy with a second bankruptcy case. The judge will likely have to decide whether to throw out the new bankruptcy case as well, should victim lawyers who reject the settlement make that request as expected. "I have more questions than answers," for now, Kaplan told both sides at a hearing held by Zoom Thursday, April 20, 2023. Kaplan's ruling is "a win for claimants, who are now one step closer to being able to vote for themselves on whether to accept" the proposed settlement, a spokesperson for J&J said in an emailed statement. Earlier Arguments Earlier, LTL was in court in New Jersey to argue about whether the lawsuits should restart, or remain on hold while J&J tries for the second time to use the bankrupt unit to persuade cancer victims to accept the settlement. Critics say they would rather take their claims to juries around the country to try to win verdicts against J&J. Lawsuits against bankrupt companies are automatically paused while a plan to repay creditors — including people who have filed lawsuits — is hashed out. LTL argued that it cannot resolve the lawsuits as part of the bankruptcy case while J&J is fighting the tens of thousands of case around the country. J&J has long denied any link between cancer and baby powder and argues that the best way to settle the lawsuits is through a negotiated plan blessed by a bankruptcy court. Victims allege that for decades J&J sold baby powder that contained talc contaminated with the toxic substance asbestos. Although J&J has prevailed in some cases, it has lost nearly a dozen suits over the years. One case was that went all the way to the US Supreme Court resulted in J&J being forced to pay $2.5 billion to a group of about 20 women. The new settlement proposal is backed by as many as 80,000 claimants, company lawyer Gregory Gordon told Kaplan in federal court on Tuesday. The proposal has split the law firms representing tens of thousands of women who say say the company's baby powder gave them cancer. Holdouts have questioned the number of claimants supporting law firms say they represent and claim J&J wrongly put LTL Management back into bankruptcy just hours after its first effort was dismissed on orders from a federal appeals court. Eventually, LTL will need to send its proposal to claimants for a vote. Should 75% of those voting back the deal, LTL would set up a trust funded with the $8.9 billion from J&J. All current and future lawsuits would then be channeled to the trust, which would use a complex set of rules to decide how much each claimant would get. J&J said Tuesday, April 18, 2023, it incurred a $6.9 billion charge attributable to the proposed talc settlement, contributing to a $68 million loss for the first quarter of 2023. The company has said it needs Chapter 11 to resolve the talc liability, which continues to grow. John Kim, LTL's chief legal officer, testified Tuesday the the number of pending talc claims doubled between the time the second bankruptcy was filed in April and the J&J subsidiary first filed Chapter 11 in October 2021. "The talc liability is enormous," Kim said. 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. MERMAID BIDCO: S&P Affirms 'B-' ICR on Refinancing, Outlook Stable ------------------------------------------------------------------ S&P Global Ratings affirmed all of its ratings on Mermaid Bidco Inc. (doing business as Datasite), including its 'B-' issuer credit rating and 'B-' issue-level rating and '3' recovery rating on its senior secured debt. The stable outlook reflects the company's limited rating upside over the next year due to macroeconomic uncertainty. However, it also incorporates S&P's expectation that Datasite will generate free operating cash flow (FOCF) to debt in the mid-single digit percent area and maintain leverage in the mid-6x range over the next 12 months. The transaction is leverage neutral but will improve the company's cash flow metrics. Datasite is issuing a $400 million add-on to its term loan B, which it will use the proceeds from to refinance the $365 million outstanding balance on its PIK-toggle shareholder loan and cover related transaction expenses. The transaction will improve the company's interest coverage ratios by decreasing its interest burden by $20 million-$30 million annually. Because Datasite had chosen to primarily pay 11% cash for interest on the PIK facility, S&P expects the transaction will also improve its free cash flow metrics. S&P said, "We expect the company will generate increased FOCF of about $60 million (5%-7% of debt) in fiscal year 2024, up from about $25 million (about 2%) in fiscal year 2023. Datasite's cash flow was limited in 2023 due to several factors, including its decision to primarily pay cash for interest on its PIK-toggle facility, its payment of $39 million of deferred tax expense, as well as a one-time working capital outflows of about $19 million in the fourth quarter related to back office re-engineering. Under its reconstructed capital structure, we expect the company will pay slightly less cash interest in 2024 despite its higher base rates. However, we expect the amortization of its remaining $108 million deferred tax liability will somewhat limit its cash flow generation compared with previous years (when it paid little in cash taxes). "A continued lull in capital market transactions could reduce Datasite's revenue in fiscal year 2024. We believe that the company's VDR product is exposed to the volatility in the capital markets because most of its corporate clients use its VDR product to manage their merger and acquisition (M&A) transactions. We expect Datasite's revenue to be flat to slightly down over the next 12 months as it faces increasing pressure from low transaction volumes. The company benefited from its customers choosing to delay their projects and keep deal sites active in fiscal year 2023, rather than canceling the deals altogether. This enabled Datasite to increase its revenue by the mid-single digit percent area despite the 16% decline in announced M&A deal flow in fiscal year 2023. However, the company began to experience top-line revenue declines in the fourth quarter as prolonged macroeconomic pressures led to prolonged weak M&A volumes. Datasite's revenue declined about 15% in the fourth quarter of 2023 relative to its peak revenue quarter in 2022. We expect M&A deal flows will remain limited, at least through the first half of fiscal year 2024, which will cause the company's revenue to decline in the first half of the year before beginning to recover with the M&A market in the second half of the year. That said, capital market activity picked up slightly in the first few months of 2023, pointing to positive directional trends that will likely support a smaller revenue decline than it experienced in the final quarter of fiscal year 2023. "We expect the company's financial sponsor will maintain a fairly aggressive financial policy.We believe Datasite is unlikely to proactively reduce its debt balance and will instead likely opt to hold cash on its balance sheet to support future M&A activity. Therefore, we project the company will maintain cash on hand until it finds a suitable target to support the buildout of a new product feature. We do not currently expect its financial sponsor will pursue dividend payouts, though we believe this could be a viable option if it is unable to find a suitable target or project. "The stable outlook reflects the company's limited rating upside over the next year due to macroeconomic uncertainty. However, it also incorporates our expectation that Datasite will generate FOCF to debt in the mid-single digit percent area and maintain leverage in the mid-6x range over the next 12 months. "We could lower our rating on Datasite if we believe its capital structure has become unsustainable. This could occur if the company is unable to generate material FOCF, which would render it difficult to cover its fixed charges and successfully refinance over the longer term." This could be occur because of: -- A more severe recession that leads to continued low capital market transaction volumes that pressure the company's revenue and earnings; or -- Datasite faces competitive pressures that lead to a deterioration in its market share. S&P could raise its rating on Datasite if: -- S&P expects the volume of capital market activity will improve and remain stable; and -- S&P expects the company will generate FOCF to debt of 5% or higher on a sustainable basis. 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 Datasite, 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 its controlling owners. This also reflects private-equity owners' generally finite holding periods and focus on maximizing shareholder returns." MICAH PROPERTY: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Micah Property LLC 761 Corporate Center Dr. Pomona, CA 91768 Business Description: The Debtor is a Single Asset Real Estate (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: April 25, 2023 Court: United States Bankruptcy Court Central District of California Case No.: 23-12496 Judge: Hon. Ernest M. Robles Debtor's Counsel: Stephen R. Wade, Esq. LAW OFFICES OF STEPHEN R. WADE, P.C. 405 N. Indian Hill Blvd. Claremont, CA 91711 Tel: (909) 985-6500 Email: srw@srwadelaw.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Lucy Seh as manager. The Debtor stated it has no creditors holding unsecured claims. https://www.pacermonitor.com/view/6QZYMOQ/Micah_Property_LLC__cacbke-23-12496__0005.0.pdf?mcid=tGE4TAMA A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/6CIC2ZQ/Micah_Property_LLC__cacbke-23-12496__0001.0.pdf?mcid=tGE4TAMA MJW ENTERPRISES: David Sousa Named Subchapter V Trustee ------------------------------------------------------- Tracy Hope Davis, U.S. Trustee for Region 17, appointed David Sousa as Subchapter V trustee for MJW Enterprises, Inc. Mr. Sousa will be compensated at $415 per hour for his services as Subchapter V trustee, in addition to reimbursement for related expenses incurred. Mr. Sousa declared that he is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: David Sousa P.O. Box 3167 Visalia, CA 93278-3167 Phone: (559) 242-2065 Email: Dave@fresnotrustee.com About MJW Enterprises MJW Enterprises, Inc. filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. E.D. Calif. Case No. 23-21171) on April 12, 2023, with $50,001 to $100,000 in both assets and liabilities. David Sousa is the Subchapter V trustee. Judge Christopher M. Klein oversees the case. The Debtor is represented by John S. Sargetis, Esq., at United Law Center. NATIONAL PHARMACY: Gets OK to Hire Geaux as Tax Credit Specialist ----------------------------------------------------------------- National Pharmacy Acquisition, LLC received approval from the U.S. Bankruptcy Court for the Middle District of Louisiana to employ Geaux Tax Resolution, LLC. The Debtor requires an employee retention tax credit specialist to determine whether it qualifies for Employee Retention Credits (ERC) and to prepare amended 941-X forms. The Debtor has agreed to pay Geaux Tax Resolution a fee of $48,050 (13 percent of the expected ERC recovery). As disclosed in court filings, Geaux Tax Resolution neither holds nor represents any interest adverse to the Debtor or the estate. Elaina Disher Geaux Tax Resolution, LLC 1795 W. Causeway Approach, Suite 202 Mandeville, LA 70471 Phone: 985-722-1040 Email: taxhelp@geauxtaxresolution.com About National Pharmacy Acquisition National Pharmacy Acquisition, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. La. Case No. 23-10102) on Feb. 17, 2023, with $1 million to $10 million in both assets and liabilities. Sharon LeBouef, manager, signed the petition. Judge Michael A. Crawford oversees the case. The Debtor tapped William E. Steffes, Esq., at The Steffes Firm, LLC as legal counsel and Daniel P. Jackson, CPA as accountant. NATIONAL PHARMACY: Taps Stirling Properties as Real Estate Agent ---------------------------------------------------------------- National Pharmacy Acquisition, LLC received approval from the U.S. Bankruptcy Court for the Middle District of Louisiana to employ Stirling Properties, LLC to market for sale its real property at 5344 Brittany Drive, East Baton Rouge Parish, La. Stirling will receive a commission equal to 6 percent of the gross sales price. Justin Langlois, regional vice president of Stirling, 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: Justin P. Langlois, CCIM Stirling Properties, LLC 8550 United Plaza Boulevard, Suite 101 Baton Rouge, LA 70809 Phone: (225) 329-0287 Fax: (225) 445-6434 Email: jlanglois@stirlingprop.com About National Pharmacy Acquisition National Pharmacy Acquisition, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. La. Case No. 23-10102) on Feb. 17, 2023, with $1 million to $10 million in both assets and liabilities. Sharon LeBouef, manager, signed the petition. Judge Michael A. Crawford oversees the case. The Debtor tapped William E. Steffes, Esq., at The Steffes Firm, LLC as legal counsel and Daniel P. Jackson, CPA as accountant. NEUBERT CONSTRUCTION: Asks Court to Approve Employment of Counsel ----------------------------------------------------------------- Neubert Construction Services, Inc. asked the U.S. Bankruptcy Court for the Middle District of Florida to approve the employment of Stichter, Riedel, Blain & Postler, P.A. as its legal counsel for the period Feb. 24 to March 8, 2023. The services provided by the firm include legal advice with respect to the duties and obligations of the Debtor under the Bankruptcy Code; analysis and pursuit of avoidance actions; and the preparation of legal papers required in the Debtor's Chapter 11 case. Stichter received the sum of $25,000 on account of pre-bankruptcy services and as a retainer for post-petition services. Scott Stichter, Esq., an attorney at Stichter, disclosed in a court filing that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Scott A. Stichter, Esq. Stichter Riedel Blain & Postler, P.A. 110 East Madison Street, Suite 200 Tampa, FL 33602 Tel: (813) 229-0144 Email: sstichter@srbp.com About Neubert Construction Services Neubert Construction Services, Inc. sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-00200) on Feb. 14, 2023, with as much as $1 million in both assets and liabilities. Judge Caryl E. Delano oversees the case. Edward J. Peterson, Esq., at Stichter Riedel Blain & Postler, P.A. represents the Debtor as counsel. OFFICE INTERIORS: Office Furniture Company in Chapter 11 -------------------------------------------------------- Michael Schwartz of Richmond BizSense reports that Longtime local office furniture company, Office Interiors of Virginia Inc., has ducked into bankruptcy. Battered by the pandemic and unable to regain its footing, a longtime local office furnishings company is seeking bankruptcy protection and searching for a buyer. Office Interiors of Virginia, a 35-year-old firm based in Sandston, filed for Chapter 11 bankruptcy on Sunday, April 16, 2023. The company said in court filings that the Chapter 11 process will allow it to remain in business, retain its 35 employees and attempt to sell the business or restructure its debts. It said many of its employees have been with the company for over 25 years. Founded in Ashland in 1988, the company offers office furniture, office space design and construction, office moving and other services. Bankruptcy filings state that the company's cofounders both died unexpectedly, and it was then sold to new ownership in February 2020. The bankruptcy filings were signed by OIV's CEO Othniel Glenwood Jordan, COO William Miller II, and CFO J. Kent Ford. The company's bankruptcy attorney, Brittany Falabella of the Hirschler law firm, said the timing of that sale couldn't have been worse, as the pandemic threw the future of office space into an unprecedented gray area, parts of which continue to linger. "The current ownership was put in place right before Covid and it has been a struggle to keep up with cash flow," Falabella said Monday, April 17, 2023. "The timing was quite unfortunate." "It's not an unusual story at this point: the pandemic affected both the labor costs and materials, and the supply chain was impacted and impacted all of their contracts and really created a difficult cash flow situation," Falabella continued. Under pressure, the company took out merchant cash advance loans, which it states only worsened its finances. It has since paid those down but has not been able to fully recover from the problems that began with the pandemic. The company said it filed for Chapter 11 relief amid increased pressure from creditors and mounting lawsuits. "We are looking at all options in terms of reorganization or a sale," Falabella said. The April 16, 2023 Chapter 11 filings lists between 100-199 creditors owed between $1 million and $10 million. It has assets in the same range. It said its only main secured creditor is First Community Bank, which loaned the company $750,000 in 2022 and a $600,000 line of credit. It owes around $100,000 to each of its three largest unsecured creditors: Available Material Handling, American Express and Hallowell. It also owes $87,000 to Atlantic Union Bank, $79,000 to edgeWorks Integration and $70,000 for health insurance to Cigna. Its other debts include back rent of $36,000 to BREIT SE Industrial and another $23,000 to Thalhimer. OIV is headquartered at 5401 Lewis Road near Richmond International Airport. At least two lawsuits have been filed against the company in recent weeks in Henrico County Circuit Court, by vendors R.A. Siewers and The New Haven Cos. Falabella is joined in the case by Hirschler colleague Robert Westermann. About Office Interiors of Virginia Office Interiors of Virginia Inc. provides professional moving and relocation services for small and large businesses of all kinds. Office Interiors of Virginia sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Va. Case No. 23-31324) on April 16, 2023. In the petition filed by Othniel Glenwood Jordan as chief executive officer, the Debtor reports estimated assets between $1 million and $10 million and estimated liabilities between $1 million and $10 million. The Debtor is represented by: Brittany B. Falabella, Esq. HIRSCHLER FLEISCHER, P.C. 2100 East Cary Street Richmond, VA 23223 Tel: 804-770-9500 Fax: 804-644-0957 Email: bfalabella@hirschlerlaw.com OMNIQ CORP: Safe City System Adds Shot Detection Technology ----------------------------------------------------------- OMNIQ Corp. announced that it has partnered with EAGL Technology, Inc to offer Shot Detection as an add on to its Q Shield AI-Based product offering. Shai Lustgarten, CEO of omniQ, commented "As part of our ongoing commitment to improving public safety through innovative technology solutions, we are excited to announce our partnership with EAGL. Their patented technology and recipient of the Homeland Security Platinum award for innovation five years in a row, is a powerful integration into our suite of offerings. Together, we can provide an early warning system that instantly alerts authorities to unauthorized vehicles and gunshot incidents, as well as the ability to pinpoint the location of a gunshot within seconds. This automated, seamless AI technology not only saves precious minutes in emergency situations but can also potentially save lives by eliminating guesswork in locating an incident. Our partnership with EAGL underscores our dedication to using cutting-edge technology and strategic partnerships to create safer communities. With growing demand from schools, hospitals, and other public spaces, our joint capabilities position us at the forefront of this market. As we continue to make progress on our safe city initiative, we are proud to offer the best solutions for our customers and remain committed to delivering value to our shareholders." About omniQ Corp. Headquartered in Salt Lake City, Utah, omniQ Corp. (OTCQB: OMQS) -- http://www.omniq.com-- provides computerized and machine vision image processing solutions that use patented and proprietary AI technology to deliver data collection, real time surveillance and monitoring for supply chain management, homeland security, public safety, traffic and parking management and access control applications. The technology and services provided by the Company help clients move people, assets and data safely and securely through airports, warehouses, schools, national borders, and many other applications and environments. Omniq Corp reported a net loss of $13.61 million for the year ended Dec. 31, 2022, compared to a net loss of $13.14 million for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $64.81 million in total assets, $75.34 million in total liabilities, and a total deficit of $10.53 million. Salt Lake City, Utah-based Haynie & Company, the Company's auditor since 2019, issued a "going concern" qualification in its report dated March 30, 2023, citing that the Company has a deficit in stockholders' equity, and has sustained recurring losses from operations. This raises substantial doubt about the Company's ability to continue as a going concern. OUR CITY MEDIA: Court OKs Cash Collateral Access Thru July 31 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida, Fort Lauderdale Division, authorized Our City Media of Florida, LLC to use the cash collateral of SouthState Bank, N.A., as successor by merger to Atlantic Capital Bank, N.A., on a final basis in accordance with the budget, through July 31, 2023. As adequate protection, the Debtor grants in favor of the Creditors a valid, binding, enforceable, non-avoidable and perfected post-petition security interest and lien in, to and against all of the Debtor's cash generated post-petition, to the same extent that the Creditors held a properly perfected prepetition security interest in such assets. In addition, the Debtor will pay SouthState payments in the aggregate amount of $3,000 each month thereafter pending further Court order. SouthState may apply the payments to the loan balance as it sees fit. The Debtor will also maintain insurance coverage for its property in accordance with the obligations under the loan and security documents with SouthState, including the Atlantic Capital Security Agreement. Any liens and security interest granted to the Creditors will be valid and perfected postpetition without the need for execution or filing of any further documents or instruments otherwise required to be filed or be executed or filed under non-bankruptcy law. A copy of the order is available at https://bit.ly/41N7wBu from PacerMonitor.com. About Our City Media of Florida, LLC Our City Media of Florida, LLC publishes several editions of local community news magazines throughout South Florida. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 22-18896) on November 17, 2022. In the petition signed by Terrance P. Jaillet, its president, the Debtor disclosed $154,782 in total assets and $2,154,633 in total liabilities. Judge Scott M. Grossman oversees the case. Robert Furr, Esq., at Furr Cohen, is the Debtor's legal counsel. PILL CLUB PHARMACY: Wins Interim Cash Collateral Access ------------------------------------------------------- The Pill Club Pharmacy Holdings, LLC and affiliates sought and obtained entry of an order from the U.S. Bankruptcy Court for the Northern District of Texas, Fort Worth Division, to use cash collateral on an interim basis in accordance with the budget. Specifically, the Debtors are authorized to use cash collateral up to $850,000 to fund payroll and other employee expenses in the ordinary course of business. The Debtors require immediate access to liquidity to ensure that they are able to continue operating their business during the Chapter 11 Cases, preserve the value of their estates for the benefit of all parties in interest, and pursue a value-maximizing restructuring transaction. The catalyst for these Chapter 11 Cases is the Debtors' difficulty recapitalizing their current balance sheet given current market conditions and the Debtor's resultant deteriorating liquidity position. This difficulty was compounded by a slate of ongoing investigative and litigation expenses, the costs of which have decreased the Debtors' runway from two years to a number of months. After careful consideration of the status of these issues and potential options to resolve them, the Debtors determined that filing the Chapter 11 Cases in the Court was appropriate and necessary to protect the Debtors' business. The Debtors have one secured obligation memorialized in the Plain English Growth Capital Loan and Security Agreement dated December 31, 2021, entered into by Hey Favor, Inc. as borrower and borrower representative, The Pill Club Pharmacy Holdings, LLC, MedPro Pharmacy, LLC, MobiMeds, Inc., the lenders from time to time party thereto and TriplePoint Venture Growth BDC Corp. in its capacity as collateral agent for the Lenders. Pursuant to the Loan Agreement, the Prepetition Borrowers granted to TriplePoint a first priority security interest in all of the Prepetition Borrowers' receivables, equipment, fixtures, general intangibles, inventory, investment property, deposit accounts, cash, certain commercial tort claims, goods and personal property, and all proceeds of each of the foregoing. As of the Petition Date, the outstanding balance due under the Loan Agreement is $30 million. To the extent they are ultimately determined to have valid liens, Prepetition Secured Parties are entitled to adequate protection of their respective interests in their Prepetition Collateral, including cash collateral, in an amount equal to aggregate diminution in value (if any) of their respective interests in such collateral occurring on or after the Petition Date. TriplePoint, for the benefit of the Prepetition Secured Parties, is granted adequate protection. To the extent of any Diminution of Value of their interests granted in the Prepetition Collateral under the Loan Agreement, TriplePoint, for the benefit of the Prepetition Secured Parties is granted replacement security interests and liens in all now owned or hereafter acquired assets and property of the Debtors and each of their Chapter 11 estates, whether real or personal, tangible or intangible, foreign or domestic, or otherwise, and any and all proceeds therefrom. To the extent of any Diminution of Value of its interests granted in the Prepetition Collateral under the Loan Agreement, TriplePoint, for the benefit of the Prepetition Secured Parties, is granted, in addition to claims under 11 U.S.C. section 503(b), and subject to the Carve-Out, an allowed superpriority administrative expense claim, which will at all times be payable from and have recourse to the Adequate Protection Collateral and proceeds thereof. A further interim hearing on the matter is set for April 26 at 9:30 a.m. A copy of the motion is available at https://bit.ly/3Amd3Dy from PacerMonitor.com. A copy of the order is available at https://bit.ly/3L3eQCp from PacerMonitor.com. About The Pill Club Pharmacy Holdings, LLC The Pill Club Pharmacy Holdings, LLC is a digital healthcare platform. The Company says it is "on a mission to empower women and people who menstruate to lead their healthiest lives." It combines telemedicine and direct-to-consumer pharmacy. The Debtor and its affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Tex. Lead Case No. 23-41090) on April 18, 2023. In the petition signed by Elizabeth Meyerdirk, chief executive officer, the Debtors disclosed up to $50,000 in assets and up to $50 million in liabilities. Judge Edward L. Morris oversees the case. The Debtors tapped Katherine A. Preston, Esq., at Winston and Strawn LLP as general bankruptcy counsel, Accordion Partners, LLC as financial advisor, and BMC Group, Inc. as claims and noticing agent. POMONA VALLEY: Tamar Terzian Appointed as Patient Care Ombudsman ---------------------------------------------------------------- Peter Anderson, the U.S. Trustee for Region 16, appointed Tamar Terzian, a partner at Terzian Law Group, PC, as patient care ombudsman for Pomona Valley Home Care, Inc. The appointment was made pursuant to the order from the U.S. Bankruptcy Court for the Central District of California approving a stipulation for the appointment of a patient care ombudsman. The U.S. Trustee is authorized to appoint a patient care ombudsman in this case under Section 333(a)(1) of the Bankruptcy Code. Ms. Terzian disclosed in a court filing that she is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Ms. Terzian can be reached at: Tamar Terzian Terzian Law Group, PC 1122 East Green St. Pasadena, CA 91106 Phone (818) 242-1100 Email: tamar@terzlaw.com About Pomona Valley Pomona Valley Home Care, Inc. filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 23-12116) on April 7, 2023, with $100,001 to $500,000 in both assets and liabilities. Susan K. Seflin has been appointed as Subchapter V trustee. Judge Sheri Bluebond oversees the case. The Debtor is represented by Thomas B. Ure, Esq., at Ure Law Firm. PURDUE PHARMA: Launch of OxyContin Copies Endangers Opioid Deal --------------------------------------------------------------- Christopher Yasiejko of Bloomberg Law reports that Purdue Pharma LP predicted "enormous" harm that would jeopardize funding for its $6 billion OxyContin settlement unless a federal judge orders that Accord Healthcare Inc. provide advance notice of any regulatory approval and anticipated launch of its copies of the opioid. District Judge Richard G. Andrews on Wednesday, April 19, 2023, acknowledged the urgency of Purdue concerns and said they could be addressed in a separate order. His comments came in an oral order denying Purdue's request to add certain language to his final judgment formalizing the Intas Pharmaceuticals Ltd. unit's patent-suit victory last week in the US District Court for the District of Delaware. About Purdue Pharma LP Purdue Pharma L.P. and its subsidiaries -- http://www.purduepharma.com/-- develop and provide prescription medicines and consumer products that meet the evolving needs of healthcare professionals, patients, consumers and caregivers. Purdue's subsidiaries include Adlon Therapeutics L.P., focused on treatment for Attention-Deficit/Hyperactivity Disorder (ADHD) and related disorders; Avrio Health L.P., a consumer health products company that champions an improved quality of life for people in the United States through the reimagining of innovative product solutions; Imbrium Therapeutics L.P., established to further advance the emerging portfolio and develop the pipeline in the areas of CNS, non-opioid pain medicines, and select oncology through internal research, strategic collaborations and partnerships; and Greenfield Bioventures L.P., an investment vehicle focused on value-inflection in early stages of clinical development. Opioid makers in the U.S. are facing pressure from a crackdown on the addictive drug in the wake of the opioid crisis and as state attorneys general file lawsuits against manufacturers. More than 2,000 states, counties, municipalities and Native American governments have sued Purdue Pharma and other pharmaceutical companies for their role in the opioid crisis in the U.S., which has contributed to the more than 700,000 drug overdose deaths in the U.S. since 1999. OxyContin, Purdue Pharma's most prominent pain medication, has been the target of over 2,600 civil actions pending in various state and federal courts and other fora across the United States and its territories. On Sept. 15 and 16, 2019, Purdue Pharma L.P. and 23 affiliated debtors each filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 19-23649), after reaching terms of a preliminary agreement for settling the massive opioid litigation. The Debtors' consolidated balance sheet as of Aug. 31, 2019, showed $1.972 billion in assets and $562 million in liabilities. U.S. Bankruptcy Judge Robert Drain oversees the cases. The Debtors tapped Davis Polk & Wardwell, LLP and Dechert, LLP as legal counsels; PJT Partners as investment banker; AlixPartners as financial advisor; and Grant Thornton, LLP as tax structuring consultant. Prime Clerk, LLC, is the claims agent. Akin Gump Strauss Hauer & Feld LLP and Bayard, P.A., represent the official committee of unsecured creditors appointed in the Debtors' bankruptcy cases. David M. Klauder, Esq., is the fee examiner appointed in the Debtors' cases. The fee examiner is represented by Bielli & Klauder, LLC. * * * U.S. Bankruptcy Judge Robert Drain in early September 2021 approved a plan to turn Purdue into a new company (Knoa Pharma LLC) no longer owned by members of the Sackler family, with its profits going to fight the opioid epidemic. The Sackler family agreed to pay $4.3 billion over nine years to the states and private plaintiffs and in exchange for a lifetime legal immunity. The deal resolves some 3,000 lawsuits filed by state and local governments, Native American tribes, unions, hospitals and others who claimed the company's marketing of prescription opioids helped spark and continue an overdose epidemic. Separate appeals to approval of the Plan have already been filed by the U.S. Bankruptcy Trustee, California, Connecticut, the District of Columbia, Maryland, Rhode Island and Washington state, plus some Canadian local governments and other Canadian entities. In early March 2022, Purdue Pharma reached a nationwide settlement over its role in the opioid crisis, with the Sackler family members boosting their cash contribution to as much as $6 billion. The settlement was hammered out with attorneys general from the eight states -- California, Connecticut, Delaware, Maryland, Oregon, Rhode Island, Vermont and Washington -- and D.C. who had opposed the previous settlement. R1 RCM: Moody's Affirms 'Ba2' CFR & Alters Outlook to Negative -------------------------------------------------------------- Moody's Investors Service affirmed the ratings at R1 RCM Inc., a provider of technology-driven healthcare revenue cycle management ("RCM") services, including its Ba2 corporate family rating and Ba2-PD probability of default. Additionally, Moody's affirmed the company's senior secured first-lien credit facilities consisting of a $600 million revolver due 2026, a $678 million term loan A due 2026, a $533 million term loan A due 2027 and a $499 million term loan B due 2029 at Ba2. The outlook was revised to negative from stable to reflect R1's weaker than expected operating performance following the acquisition of Cloudmed in June 2022 that has resulted in higher leverage relative to Moody's previous expectation with debt to EBITDA of 5.4x as of December 31, 2022 not reaching 4x until mid-2024. The negative outlook also considers the company's highly competitive healthcare RCM services market and need for the company to achieve high revenue growth and improved profitability to offset higher interest costs and fund on-boarding of new clients. The speculative grade liquidity ("SGL") rating was downgraded to SGL-2 from SGL-1 in recognition of Moody's diminished free cash flow expectations from exposure to rising interest rates and modest reliance on its revolving credit facility, as R1 continues to integrate Cloudmed and onboard new customers in 2023. RATINGS RATIONALE R1's Ba2 CFR reflects the company's established position in the healthcare revenue cycle management space, including its large operating scale with a Moody's-expected $2.2 billion of revenue in 2023. The company has experienced high revenue growth rates in the low-double-digit range historically with strong customer renewal rates governed by multi-year service agreements. Demand for services is supported by favorable healthcare industry trends that include increased healthcare spending and strain on healthcare providers to drive improved collections as they face high labor cost inflation, increased patient volumes at lower margins, and regulatory-driven complexity in the billing process. The credit profile is constrained by a debt-funded acquisition growth strategy that led to high debt to EBITDA of 5.4x (or 6.1x after expensing capitalized software costs) as of December 31, 2022 that Moody's expects will improve to the mid-4x range by the end of 2023. Moody's excludes one-time adjustments for stock-based compensation, integration costs, expected cost savings, and strategic initiatives. Longer payer reimbursement turnaround times drove lower incentive fees, which in turn drove lower profitability in 2022. This has delayed leverage reduction relative to Moody's previous expectations, such that debt to EBITDA is unlikely to decline below 4x until mid-2024. Additionally, rising benchmark rates have increased annual cash interest expense, which Moody's forecasts will increase to $130 million in 2023 and will drive free cash flow to debt to around 4%. The company also has modest, but improving, customer concentration with Ascension that Moody's expects will comprise around 35% of revenue in 2023. Company ownership is also concentrated with around 30% of common equity excluding warrants held by an investment vehicle controlled by affiliates of Ascension Health Alliance ("Ascension") and Towerbrook Capital Partners. All financial metrics cited reflect Moody's standard adjustments. The negative outlook reflects Moody's expectation that debt to EBITDA will remain above 4x over the next 12 to 18 months and the risk that higher costs, lower volumes, or a more aggressive financial policy from management could result in sustained higher leverage and a weaker liquidity profile. The outlook could be changed to stable if Moody's expects debt to EBITDA will be sustained below 4x and free cash flow to debt approaches 10%. The SGL-2 liquidity rating reflects Moody's view of R1's liquidity profile as good, supported by Moody's expectations for around $75 million of free cash flow in 2023, and total available liquidity of $610 million on December 31, 2022 that is comprised of $110 million of cash and $500 million of availability on its $600 million revolver due 2026. Moody's expects free cash flow of around $75 million in 2023 that should improve to nearly $150 million in 2024. Moody's also expects free cash flow will be sufficient to cover the company's annual mandatory debt amortization of $50 million in 2023 with any remainder going towards repayment of revolver borrowings. Financial covenants apply to the revolver and term loan A and include a maximum total net leverage ratio of 5x, with a step-down to 4.5x, and a static minimum interest coverage ratio of 3x. An acquisition or a share repurchase can permit a step-up in the leverage ratio by a half turn for the following six fiscal quarters. The leverage covenant is not contingent upon any minimum level of revolver borrowings. Moody's expects the company to be well in compliance with its covenants over the next 12 to 18 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS While unlikely during the next 12 to 18 months given the negative outlook, ratings could be upgraded if R1 continues to grow revenue scale at roughly double-digit rates, sustains a very good liquidity profile, debt to EBITDA and retained cash flow to net debt are sustained at 2.5x and above 30%, respectively. Additionally, a largely unsecured debt capital structure and a track record of achieving and commitment to maintaining moderate financial leverage and balanced financial strategies would also be supportive of higher ratings. A ratings downgrade could result if organic revenue grows at no better than mid-single-digit percentages, if Moody's expects debt to EBITDA leverage will remain above 4x, retained cash flow to net debt falls below 20%, or if liquidity deteriorates. Downgrades: Issuer: R1 RCM Inc. Speculative Grade Liquidity Rating, Downgraded to SGL-2 from SGL-1 Affirmations: Issuer: R1 RCM Inc. Corporate Family Rating, Affirmed Ba2 Probability of Default Rating, Affirmed Ba2-PD Senior Secured 1st Lien Bank Credit Facility, Affirmed Ba2 Outlook Actions: Issuer: R1 RCM Inc. Outlook, Changed To Negative From Stable The principal methodology used in these ratings was Business and Consumer Services published in November 2021. With Moody's-expected 2023 revenue around $2.2 billion, Utah-based R1 RCM (NASDAQ: RCM) provides technology-enhanced revenue cycle management and physician advisory services to healthcare providers including acute-care hospitals and hospital- and office-based physicians and emergency medical facilities. Affiliates of private equity firm New Mountain Capital, and TowerBrook Capital Partners, and Ascension hold about 60% of the company's common equity excluding warrants. RED INTERMEDIATECO: Moody's Alters Outlook on 'B3' CFR to Negative ------------------------------------------------------------------ Moody's Investors Service affirmed Red IntermediateCo LLC's (dba Virgin Pulse) B3 corporate family rating and B3-PD Probability of Default Rating and changed the rating outlook to negative from stable. At the same time, Moody's affirmed the B2 ratings on the senior secured first lien credit facilities and the Caa2 rating on the senior secured second lien credit facility, each issued by Virgin Pulse, Inc., a wholly-owned indirect subsidiary of Red IntermediateCo LLC. The change in outlook to negative from stable reflects Moody's view that deleveraging since the Welltock acquisition in December 2021 has been slower than expected. Moody's now expects adjusted debt to EBITDA to decline to about 8.0x over the next year as the company continues to make strategic investments in sales and marketing, research and development, and technology to support growth momentum. High leverage limits the company's flexibility to respond to an uncertain macro environment and any operational missteps. Moody's took the following rating actions: Affirmations: Issuer: Red IntermediateCo LLC Corporate Family Rating, Affirmed B3 Probability of Default Rating, Affirmed B3-PD Issuer: Virgin Pulse, Inc. Senior Secured First Lien Bank Credit Facility, Affirmed B2 (LGD3) Senior Secured Second Lien Bank Credit Facility, Affirmed Caa2 (LGD5) Outlook Actions: Issuer: Red IntermediateCo LLC Outlook, Changed To Negative From Stable Issuer: Virgin Pulse, Inc. Outlook, Changed To Negative From Stable RATINGS RATIONALE The B3 CFR reflects Virgin Pulse's high leverage, modest scale and niche business focus in enterprise health and wellness applications. Moody's adjusted debt to EBITDA excluding actioned cost synergies and productivity remained elevated since the acquisition in December 2021. As the full year acquisition impact and cost savings are reflected, financial leverage is expected to improve to 8.0x in 2023; however, it will remain high due to ongoing investments such as R&D and navigation capabilities in the platform to enhance customer engagement and support growth initiatives. Because the corporate wellness market is highly fragmented, Moody's expects the company will continue to pursue an acquisitive growth strategy and will favor shareholder return which may limit potential debt reduction. Virgin Pulse's credit profile is supported by the company's growth prospects, highly recurring subscription revenues, strong retention rates, and high end-user engagement. Operating performance could be pressured in the face of macroeconomic uncertainty including ongoing high inflation and accelerating layoffs as revenues are based on number of employees at customers; however, subscriptions account for more than 90% of revenue and the company has an average enterprise contract term of 3 years which provide good visibility into future earnings. While recent margins have been pressured due to transaction and integration costs associated with the acquisition and investments, Moody's expects the company to expand its margin over time through cost discipline and improving operating leverage. Moody's expects Virgin Pulse will maintain adequate liquidity over the next 12-18 months supported by relatively light capital intensity, cash on hand, projected free cash flow generation and revolver availability. As cost synergies and productivity are fully reflected, the company is projected to generate free cash flow of $10-$20 million annually. Virgin Pulse's liquidity is further supported by $30 million of cash balance and $65 million revolving credit facility. Due to the seasonality of the business operations, the company typically draws on the revolver in the 4th quarter and repays it in the 1st quarter as the collections from the renewals flow in. The facility has a springing first lien net leverage covenant of 8.75x that becomes effective if more than 40% is drawn. As of September 2022, the company complied with first lien leverage ratio with ample headroom. Absent any acquisitions, Moody's expects the company to make limited draws on this facility over the next 12 months. Virgin Pulse's debt maturity profile is well-positioned with its revolving facility to expire in April 2026, first lien term loan due April 2028 and second lien term loan due April 2029. There is no financial covenant on the term loan. Substantially all assets are encumbered by the revolver and secured notes, leaving little alternative liquidity sources. The B2 rating on the first lien senior secured credit facilities reflects first lien claim on substantially all assets of the borrower and guarantors. The Caa2 rating on the second lien senior secured term loan reflects its junior claim position relative to the first lien senior secured credit facilities. The negative outlook reflects Moody's expectation that leverage will remain elevated at 8.0x over the next 12 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if Virgin Pulse's operating performance suffers due to failure to effectively manage its growth and acquisition strategy and free cash flow and liquidity position deteriorate. Specifically, the ratings could be downgraded if adjusted debt to EBITDA is sustained above 7.5 times. The ratings could be upgraded if Virgin Pulse successfully builds scale and expands its capabilities both organically and through acquisitions, while maintaining a strong margin and free cash flow profile. An upgrade would also be supported by a demonstration of conservative financial policies, including debt reduction. Specifically, the ratings could be upgraded if adjusted debt to EBITDA is sustained below 6.0 times. Virgin Pulse is a provider of subscription-based digital health and wellbeing enterprise software and related service for employers and payors. The company provides a customized platform to clients, with a suite of solutions including mobile wellbeing and digital health, a multi-modal lifestyle condition management program, coaching, benefits navigation, care guidance, and a diabetes prevention therapeutics program. The company is owned by Marlin Equity Partners. Total revenue was $347 million as of last twelve months ended September 2022. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. RESTORATION HARDWARE: Moody's Alters Outlook on 'Ba3' CFR to Neg. ----------------------------------------------------------------- Moody's Investors Service changed Restoration Hardware, Inc.'s ("RH") outlook to negative from stable. Moody's also affirmed RH's ratings including its corporate family rating at Ba3 and probability of default rating at Ba3-PD. The senior secured first lien term loan ratings were also affirmed at Ba3. The speculative grade liquidity rating ("SGL") is unchanged at SGL-1. The change in outlook to negative reflects RH's weak operating performance as it is expect to continue to face a challenging luxury furniture market in 2023. RH is working to reduce inventories and launch new product collections in the second half of the year to reengage customers while streamlining certain costs. Its international expansion will continue with its first opening outside of London in 2023 which adds margin pressure as these efforts are scaled. Although LTM debt/EBITDA is approximately 3.9x, Moody's expects earnings to decline such that leverage will increase significantly and, at RH's current levels of debt, will approach 5.5x at the end of fiscal 2023. RH's SGL-1 speculative grade liquidity rating reflects its significant cash balance of $1.5 billion and its undrawn $600 million ABL revolver with $560 million of borrowing availability and the expectation that RH will generate positive free cash flow despite its weathering a significant business contraction. Affirmations: Issuer: Restoration Hardware, Inc. Corporate Family Rating, Affirmed Ba3 Probability of Default Rating, Affirmed Ba3-PD Senior Secured 1st Lien Term Loan B, Affirmed Ba3 Senior Secured 1st Lien Term Loan B2, Affirmed Ba3 Outlook Actions: Issuer: Restoration Hardware, Inc. Outlook, Changed To Negative From Stable RATINGS RATIONALE RH's Ba3 CFR reflects its strong home luxury brand, particularly in furniture, the success of its existing Design Galleries evidenced by its solid operating margins and its very good liquidity. Nonetheless, the rating is constrained by the cyclical nature of the home furnishing industry which could cause consumers to delay, forego or trade down on purchases in recessionary periods. RH is coming off a period of outsized growth in 2021 combined with a cooling off of the luxury housing market in 2022 which has resulted in a significant contraction of demand for its products. The rating is also constrained by its aggressive financial and business strategies. The company maintains a long-term goal to buildout its brand globally requiring significant capital investment including its continued plans its convert to a large box gallery styled store concept, its expansion to international markets, its growth into hospitality as well as luxury product markets. In 2022 RH continued to pursue significant share repurchases with $1 billion completed in 2022 despite the weakness in facing its operating markets. The negative outlook reflects Moody's expectation operating performance will remain under significant pressure as the luxury furniture market faces declining demand and the RH continues its international rollout. Any significant deterioration in liquidity or material restricted payments including share repurchases before the company returns to growth and leverage is sustained below 4.5x would be viewed negatively. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if there is a clear articulation of conservative financial strategies while maintaining very good liquidity and solid operating performance including the successful opening of new galleries. Quantitatively, the ratings could be upgraded if Moody's adjusted debt/EBITDA is sustained below 3.5x and adjusted EBIT margins sustained above 20%. The ratings could be downgraded if there is a deterioration in the company's overall operating performance or liquidity profile. The ratings could also be downgraded if aggressive financial strategies, including share repurchases and other restricted payments, unsuccessful gallery openings or declining operating performance results in Moody's adjusted debt/EBITDA sustained above 4.5x. The ratings could also be downgraded should the company expand its operations into new sectors that materially changes its current business profile. Headquartered in Corte Madera, California, RH, is a home furnishings company that offers its collection through its retail galleries, catalog, and online. As of January 28, 2023, the company operated 67 total galleries including 28 design galleries and 35 legacy galleries. The company also operates 14 Waterworks Showrooms and 37 outlets. For the twelve months ending January 28, 2023, RH had approximately $3.6 billion in revenue. The principal methodology used in these ratings was Retail published in November 2021. SCST REALTY: Unsecureds to Get Nothing in Liquidating Plan ---------------------------------------------------------- SCST Realty Group, LLC, filed with the U.S. Bankruptcy Court for the District of New Jersey a Small Business Combined Plan of Liquidation and Disclosure Statement dated April 24, 2023. The Debtor is a New Jersey limited liability company that exists for the purpose of owning certain real property and improvements located at 2431 Reed Street #2, Philadelphia, PA 19146 (the "Property"). The tenant at the Property is Direct Air, LLC. Both Direct Air and SCST are companies owned by Salvatore Campagna and Salvatore Taormina. Direct Air is not currently a debtor in a bankruptcy proceeding and does not currently have the intention of filing a petition for relief. Direct Air operates a HVAC construction business that services the Philadelphia metropolitan area. SCST is owned 50% by Salvatore Campagna and 50% by Salvatore Taormina. SCST's only assets are the Property, its improvements, and the rights flowing from the Property. This is a Plan of Liquidation whereby the Debtor intends to sell its only asset, real property located at 2431 Reed Street, Unit 2, Philadelphia, PA 19146 to Legacy Reed Street, LLC. SCST and Legacy have executed a prepetition agreement of sale. When SCST was unable to close on the sale to Legacy pre-petition, Legacy obtained a judgment against SCST compelling specific performance. This Plan permits SCST to sell its property to Legacy free and clear of all liens, claims, and encumbrances. Secured creditors with liens against SCST's property will be paid from the proceeds of the sale in accordance with the priority of their valid liens. The sale to Legacy will be subject to higher and better bids. Since SCST only owns real estate and does not operate, and the value of its only asset is insufficient to pay all secured creditors in full, SCST does not intend to pay any unsecured creditors through this Plan. Class 3 consists of General Unsecured Creditors. No payment to unsecured creditors under the Plan. This Class is impaired. Class 4 consists of Equity Interest Holders. SCST's members will retain their equity interest for the purposes of winding up the company under New Jersey Law. SCST intends to sell the Property to Legacy pursuant to the Legacy Sale Agreement for the purchase price of $1,300,000.00. The sale to Legacy shall be free and clear of all liens, claims, and encumbrances pursuant to Section 363(f) of the Bankruptcy Code. Any liens shall attach to the proceeds of the sale and shall be distributed in the same amount and priority as they existed pre-petition. The sale shall be subject to higher and better offers up until the date of hearing on confirmation of this Plan. A full-text copy of the Combined Plan and Disclosure Statement dated April 24, 2023 is available at https://bit.ly/40Fd1Bv from PacerMonitor.com at no charge. Proposed Counsel to the Debtor: Harry J. Giacometti, Esq. FLASTER/GREEBERG, P.C. 1717 Arch Street Suite 3300 Philadelphia, PA 19103 Tel: (215) 279-9393 Email: harry.giacometti@flastergreenberg.com About SCST Realty SCST Realty Group, LLC is a Single Asset Real Estate (as defined in 11 U.S.C. Section 101(51B)). It owns a property located at 2431 Reed Street, Unit 2, Philadelphia, PA 19146 valued at $1.3 million. SCST Realty Group filed a Chapter 11 petition (Bankr. D.N.J. Case No. 23-13078) on April 13, 2023. In the petition signed by Salvatore Campagna, member, the Debtor disclosed $1,300,000 in assets and $1,607,945 in liabilities. The Debtor is represented by Harry J. Giacometti, Esq. of FLASTER/GREEBERG, P.C. SEMRAD LAW: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: The Semrad Law Firm, LLC 11101 South Western Avenue Chicago, IL 60643 Business Description: Semrad Law is a debt relief agency -- a bankruptcy law firm offering legal relief to families struggling with debt. Chapter 11 Petition Date: April 26, 2023 Court: United States Bankruptcy Court District of Delaware Case No.: 23-10512 Debtor's Counsel: Joseph C. Barsalona II, Esq. PASHMAN STEIN WALDER HAYDEN, P.C. 1007 North Orange Street, 4th Floor, Suite #183 Wilmington, DE 19801 Tel: 302-592-6497 Email: jbarsalona@pashmanstein.com Debtor's Financial Advisor: NOVO ADVISORS Total Assets as of Dec. 31, 2022: $8,267,344 Total Liabilities as of Dec. 31, 2022: $7,809,414 The petition was signed by Patrick Semrad as manager. 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/DXRETDI/The_Semrad_Law_Firm_LLC__debke-23-10512__0001.0.pdf?mcid=tGE4TAMA SHOE CITY: Shuts Down 39 Stores in Virginia, Maryland and D.C. Area ------------------------------------------------------------------- Megan Sayles of AFRO News reports that Shoe City is closing the doors of its 39 stores across the Maryland, Virginia and D.C. area after more than 70 years in business. The family-owned urban footwear retailer, also known as YCMC, filed for Chapter 11 bankruptcy in March. The business reports that they currently have $16 million in outstanding debt. The shoe store also owes more than $3 million on a $10 million loan from Truist Bank. Shoe City issued a statement on its website to inform customers about the cease of operations. . "We have made the difficult decision to cease operations for YCMC," read the statement. "Order previously placed will be processed and shipped provided the merchandise is available. We will continue to process any and all returns from orders placed prior to this announcement." Shoe City's roots began in Baltimore when it opened in 1949 as Eileen Shoes on Monument Street. Then, in 1980, the footwear company rebranded and began using the moniker, Shoe City. Today, the retailer is known for selling footwear, apparel and accessories from well-known athletic brands, like Nike, Adidas and Puma. However, over the last few years, Shoe City has experienced a decline in sales and net profit. According to court documents, the company’s operating losses were $280,000 and $1.76 million in 2020 and 2021 respectively. In 2020, Shoe City also began receiving less high-end products and new sneaker releases from vendors, according to the first-day declaration. During the spring of 2022—in an effort to address its financial woes—Shoe City forged a deal with the Arklyz Group, which sought to expand its North American footprint, to acquire the footwear company, but the deal fell through. Most recently, Shoe City lost its top shoe vendor in March, according to court documents, and other vendors started requiring the footwear company to send a cash advance before shipping products to its stores. "I think it's a bummer for the area," said Chris Bolden, a D.C. resident. "They were big in the area, and they really helped the community out." Bolden is the owner of ICE ENT Apparel, a brand he started to honor his younger brother who was murdered in 2016. Much of his clothing displays the saying, "spread the love," promoting an end to violence in communities. Back in 2021, Bolden came across a social media post from Shoe City looking for new brands to introduce in its stores. The Northeast D.C. native said he wasn’t sure if the inquiry was legitimate, but he took a chance anyway. A few weeks later, Shoe City reached out to him to schedule a business meeting, and the footwear company offered him a spot in the store. "I first saw my clothing in Prince George's Mall. That's the mall I grew up in, and I have gone to that mall for the last however many years," said Bolden. "To see my face on the front of Shoe City was such a big deal to me, and it was also a big deal to the people who had been watching me from my first shirt to my first store." About ESCO Ltd. ESCO Ltd., doing business as Shoe City, retails apparel and footwear. ESCO Ltd. filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case No. 23-12237) on March 31, 2023. In the petition filed by Stanley W. Mastil, as chief restructuring officer, the Debtor reported assets and liabilities between $10 million and $50 million. The Debtor is represented by: Daniel Jack Blum, Esq. Polsinelli PC 1800 Woodlawn Drive Gwynn Oak, MD 21207-4007 Tel: 202-772-8483 Email: jack.blum@polsinelli.com SKILLZ INC: S&P Upgrades ICR to 'CCC+' After Distressed Exchange ---------------------------------------------------------------- S&P Global Ratings raised its issuer credit rating to 'CCC+' from 'SD' (selective default). S&P raised its issue-level rating on the senior secured notes to 'CCC' from 'D'. The negative outlook reflects uncertainty around the company's ability to turn its substantially negative cash flow positive over the next three years given ongoing challenges in right-sizing its operations and its unproven business model. The distressed exchange lowers the company's debt burden, but S&P expects cash burn to continue over the next few years due to poor profitability. With the recently completed distressed exchange, the company reduced its debt burden to roughly $130 million in outstanding senior secured notes from $290 million in outstanding notes due 2026. This transaction lowered the company's debt burden by more than half and significantly reduced its annual interest expense by roughly $16 million. S&P said, "However, even with this meaningful debt reduction, we believe that its EBITDA will remain negative for the next two or three years due to ongoing operational challenges including sub-scale revenues, user acquisition costs, and engagement marketing costs. We believe that to reach sufficient scale to manage its debt burden longer term the company will need to increase its revenue growth and reach positive EBITDA and positive cash flow well before the maturity of its secured notes due in 2026. In our view, this will require ongoing marketing and technology spending as well as the addition of newer games to its platform. This will necessitate further investment, which we believe will result in negative EBITDA over the next two to three years and even worse cash flow after considering the company's annual cash interest costs, marginal cash taxes, and roughly $3 million in annual capital expenditure (capex). Therefore, the company is wholly dependent on its available cash balance, including short-term marketable securities, which we estimate are roughly $350 million pro forma for the distressed exchange as of Dec. 31, 2022. "We have low expectations for operating performance over the next two years due to underperformance in 2022 revenues. Skillz's 2022 full-year revenue came in at $270 million, which is dramatically lower than the company's initial guidance and our previous expectations. The lower guidance was partially due to the company's inability to profitably attract consumers to the games on its platforms. This also reflected the company's decision to pull back on engagement marketing and user acquisition spending to manage its costs base. The company has suspended guidance for 2023 as it assesses its path forward. We estimate revenue to decline roughly 0%-10% in 2023 before improving by 0%-20% in 2024, although we believe the company's revenue performance is highly uncertain due to strategy changes and the unproven nature of its platform." The company faces substantial execution risk to reach sufficient scale. Skillz operates a niche strategy as a skills-based competition business model. This approach provides an alternative to advertising and in-app purchase monetization models for small developers in the casual gaming market. Its unique platform allows small game developers to compete with larger ones like Activision, Electronic Arts (EA), Playtika, and Zygna, which all have greater capacity than Skillz to spend on user acquisition marketing. Further, Skillz's approach is unique because it performs user acquisition marketing for the developer in exchange for a higher share of the game's profits. This profit share can change over time as some developers perform their own user acquisition marketing. Ultimately, Skillz is aiming to build a virtuous cycle in which both the platform and the developer can expand the user base and increase user retention. S&P said, "In our view, the company's reassessment of its engagement marketing and user acquisition spending could jeopardize its ability to reach sufficient scale to enable this virtuous cycle. It is also possible that its lackluster operating performance could limit how attractive its platform is to certain game developers. Further, we believe that the substantial turnover of its executive team and its lack of sufficient internal controls (which forced Skillz to recently restate its financial disclosures) both hurt the company's operating performance and position." The negative outlook reflects uncertainty around the company's ability to turn its substantially negative cash flow positive over the next three years given ongoing challenges in right-sizing its operations and its unproven business model. S&P could lower the rating if it envisions a specific default scenario over the next 12 months. A conventional default is currently unlikely due to the company's substantial cash balance, but we could lower the rating if: -- The company continues to burn cash at a high annual rate and S&P believes a conventional default is likely. This is because user acquisition costs remain elevated and users churn faster than expected due to changes in the company's engagement marketing strategy. This scenario assumes the company cannot raise additional capital; or -- The company seeks to restructure its debt obligations. While unlikely over the next 12 months, S&P could raise its ratings if: -- Revenues grow substantially above the high-double-digit percentage area; -- The company demonstrates consistent profitability with a track record of meeting its annual guidance; and -- Cash generation turns positive. ESG credit indicators: E-2, S-3, G-3 STARR GENERAL: Seeks Cash Collateral Access ------------------------------------------- Starr General Contracting Corporation asks the U.S. Bankruptcy Court for the District of New Jersey for authority to use cash collateral to satisfy the necessary operating and maintenance costs which are critical to its business operations. BB&T Commercial Equipment Capital Corp., Newlane Finance, and, the United States Small Business Association are the only purported secured creditors of the Debtor. BB&T and Newlane's purported liens are on equipment and not on accounts receivable. The Debtor does not have inventory. As of the Petition Date, BB&T was due approximately $29,638. As of the Petition Date, Newlane was due approximately $24,167. As of the Petition Date, the SBA was due approximately $166,000. Pursuant to UCC Filings with the State of New Jersey, the SBA also has a purported security interest in, among other things, all of the Debtor's assets including, but not limited to the Debtor's accounts, money and all products and proceeds thereof. The Debtor contends its assets total approximately $503,000 and thus, the SBA is adequately protected. The debt owed to the SBA is current and the Debtor is asking as part of its cash collateral budget to continue making payments to the US SBA on account of its debt. Newlane, according to the UCC search, has not filed a UCC-1 even though it asserts to have a lien on equipment. BB&T's lien is on 50 port-a-potties and 2 holding tanks, and the Newlane lien is on a 2022 11-foot Switch n Go Hoist System and a 2022 11-foot dumpster can. A copy of the Debtor's motion is available at https://bit.ly/3AtQSvf from PacerMonitor.com. About Starr General Contracting Corporation Starr General Contracting Corporation is a construction company that does both residential and commercial construction. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. N.J. Case No. 23-13205) on April 18, 2023. In the petition signed by Charles Starr, Jr., president, the Debtor disclosed up to $1 million in assets and up to $500,000 in liabilities. David A. Kasen, Esq., at Kasen & Kasen, P.C., represents the Debtor as legal counsel. STARRY GROUP: Committee Taps M3 Advisory as Financial Advisor ------------------------------------------------------------- The official committee of unsecured creditors of Starry Group Holdings, Inc. and its affiliates seek approval from the U.S. Bankruptcy Court for the District of Delaware to employ M3 Advisory Partners, LP as its financial advisor. The firm will render these services: a. assist with the analysis, review and monitoring of the chapter 11 process, including, but not limited to assessment of potential recoveries for general unsecured creditors; b. assist with the review of financial information prepared by the Debtors, including, but not limited to, cash flow projections and budgets, business plans, cash receipts and disbursement analysis, asset and liability analysis, and the economic analysis of proposed transactions for which Court approval is sought; c. assist with the assessment and monitoring of the Debtors' short term cash flow, liquidity, and operating results; d. analyze the Debtors' proposed business plans and chapter 11 plan, and develop alternative scenarios, if necessary; e. assess the Debtors' various pleadings and proposed treatment of unsecured creditor claims therefrom; f. prepare or review, as applicable, avoidance action and claim analyses; g. assist the Committee in reviewing the Debtors' financial reports, including, but not limited to, statements of financial affairs, schedules of assets and liabilities, DIP budgets, and monthly operating reports; h. advise the Committee on the current state of the Chapter 11 Cases; i. advise the Committee in negotiations with the Debtors and third parties as necessary; j. assist with the prosecution of the Committee's responses/objections to the Debtors' motions, including attendance at hearings and depositions, and providing expert reports/testimony on case issues as required by the Committee; k. render such other general business consulting or such other assistance as the Committee or its counsel may deem necessary that are consistent with the role of a financial advisor and not duplicative of services provided by other professionals in this proceeding; and l. provide such other assistance as is ancillary to the above or as M3 and the Committee shall mutually agree. M3's standard hourly rates are: Managing Partner $1,350 Senior Managing Director $1,245 Managing $1,025 - 1,150 Director $840 - 945 Vice President $750 Senior Associate $650 Associate $550 Analyst $450 M3 is a "disinterested person" as that term is defined under section 101(14) of the Bankruptcy Code, as disclosed in the court filing. The firm can be reached through: Mohsin Y. Meghji M3 Advisory Partners, LP 1700 Broadway, 19th Floor New York, NY 10019 Phone: (212) 202-2200 Email: mmeghji@m3-partners.com About Starry Group Boston-based Starry Group Holdings, Inc. (NYSE: STRY) is a licensed fixed wireless technology developer and internet service provider. It is an early-stage growth company. Starry Group Holdings and 11 affiliates filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10219) on Feb. 20, 2023. As of Sept. 30, 2022, Starry Group had $270.6 million in total assets against $309.7 million in total liabilities. The petitions were signed by William J. Lundregan as authorized officer. Judge Karen B. Owens oversees the cases. The Debtors tapped Young Conaway Stargatt & Taylor, LLP and Latham & Watkins, LLP as legal counsel; PJT Partners, LP as investment banker; FTI Consulting, Inc. as financial advisor; and Kurtzman Carson Consultants, LLC as claims and noticing agent and administrative advisor. The U.S. Trustee for Regions 3 and 9 appointed an official committee to represent unsecured creditors in the Debtors' Chapter 11 cases. The committee is represented by David R. Hurst, Esq. STARRY GROUP: Committee Taps McDermott Will & Emery as Counsel -------------------------------------------------------------- The official committee of unsecured creditors of Starry Group Holdings, Inc. and its affiliates seek approval from the U.S. Bankruptcy Court for the District of Delaware to employ McDermott Will & Emery LLP as its counsel. The firm will render these services: (a) advise the Committee about its rights, powers, and duties in the Chapter 11 Cases; (b) assist and advise the Committee in its consultations and negotiations with the Debtors and other parties-in-interest in connection with the administration of the Chapter 11 Cases; (c) solicit information from and provide information to the Debtors' unsecured creditors as a group; (d) assist the Committee in analyzing the claims of the Debtors' creditors and the Debtors' capital structure and negotiating with holders of claims against and interests in the Debtors; (e) assist the Committee in its investigation of the acts, conduct, assets, liabilities, and financial condition of the Debtors and their insiders and of the operation of the Debtors' businesses; (f) assist the Committee in its analysis of, and negotiations with the Debtors and other parties concerning, matters related to, among other things, the assumption or rejection of executory contracts and unexpired leases, the sale or other disposition of property of the Debtors' estates, the financing of other transactions, and the terms of one or more plans of reorganization or liquidation for the Debtors and accompanying disclosure statements and related plan documents; (g) assist and advise the Committee on its communications with the Debtors' unsecured creditors as a group regarding significant matters in the Chapter 11 Cases; (h) represent the Committee at all hearings and other proceedings before the Court; (i) review and analyze applications, orders, statements of operations, and schedules filed with the Court and advise the Committee as to their propriety and, to the extent deemed appropriate by the Committee, support, join, or object thereto; (j) advise and assist the Committee with respect to any legislative, regulatory, or governmental activities; (k) assist the Committee in its review and analysis of the Debtors' various agreements; (l) prepare, on behalf of the Committee, any pleadings, including, without limitation, motions, memoranda, complaints, objections, or comments in connection with any matter related to the Debtors or the Chapter 11 Cases; (m) investigate and analyze any claims belonging to the Debtors' estates; and (n) perform such other legal services as may be required or are otherwise deemed to be in the interests of the Committee in accordance with the Committee's rights, powers, and duties, as set forth in the Bankruptcy Code, the Bankruptcy Rules, the Local Rules, and other applicable law. The hourly rates of the firm's counsel and staff are as follows: Partners $1,170 - $2,330 Senior Counsel $895 - $1,820 Employee Counsel $900 - $1,685 Associates $655 - $1,125 Paraprofessionals $240 - $675 In addition, the firm will seek reimbursement for expenses incurred. In accordance with Appendix B-Guidelines for Reviewing Applications for Compensation and Reimbursement of Expenses Filed under 11 U.S.C. Sec. 330 for Attorneys in Larger Chapter 11 Cases, McDermott disclosed that: (a) McDermott has not agreed to a variation of its standard or customary billing arrangements for this engagement, except as disclosed herein; (b) none of McDermott's professionals included in this engagement have varied their rates based on the geographic location of the Chapter 11 Cases; (c) McDermott did not represent the Committee before the Petition Date; and (d) McDermott expects to develop a prospective budget and staffing plan to comply with the U.S. Trustee's requests for information and additional disclosures, and any orders of the Court. Recognizing that unforeseeable fees and expenses may arise in large chapter 11 cases, McDermott may need to amend the budget as necessary to reflect changed circumstances or unanticipated developments. Kristin K. Going, Esq., a partner at McDermott Will & Emery, 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: Darren Azman, Esq. Kristin Going, Esq. Stacy A. Lutkus, Esq. Natalie Rowles, Esq. One Vanderbilt Avenue New York, NY 10017-3852 Telephone: (212) 547-5400 Fax: (212) 547-5444 E-mail: dazman@mwe.com kgoing@mwe.com salutkus@mwe.com rowles@mwe.com About Starry Group Boston-based Starry Group Holdings, Inc. (NYSE: STRY) is a licensed fixed wireless technology developer and internet service provider. It is an early-stage growth company. Starry Group Holdings and 11 affiliates filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10219) on Feb. 20, 2023. As of Sept. 30, 2022, Starry Group had $270.6 million in total assets against $309.7 million in total liabilities. The petitions were signed by William J. Lundregan as authorized officer. Judge Karen B. Owens oversees the cases. The Debtors tapped Young Conaway Stargatt & Taylor, LLP and Latham & Watkins, LLP as legal counsel; PJT Partners, LP as investment banker; FTI Consulting, Inc. as financial advisor; and Kurtzman Carson Consultants, LLC as claims and noticing agent and administrative advisor. The U.S. Trustee for Regions 3 and 9 appointed an official committee to represent unsecured creditors in the Debtors' Chapter 11 cases. The committee is represented by David R. Hurst, Esq. SVB FINANCIAL: Fight Over Seized Deposits to Test Authority of FDIC ------------------------------------------------------------------- James Nani of Bloomberg Law reports that Silicon Valley Bank parent's, SVB Financial, fight for seized deposits will test FDIC authority. The Federal Deposit Insurance Corp. is poised to put up an aggressive fight in a showdown over $2 billion that Silicon Valley Bank's former parent company and its bondholders say belongs to them. The $2 billion bank deposit represents a significant amount of potential cash recovery to the bankrupt SVB Financial Group and its bondholders, who are owed $3.3 billion, and other creditors. But the FDIC has laid claim to the money. It aims to offset potential claims related to Silicon Valley Bank, which cost the FDIC’s deposit insurance fund an estimated $20 billion. The emerging battle over the $2 billion may test the FDIC's power to put bankrupt banking parent companies on the hook for the costs of their failed banks. The FDIC will likely be emboldened in the battle through a number of factors, including its powers from Congress, the potential use of its own internal claims process, and a section of bankruptcy law that favors federal banking agencies. In the coming months, a New York bankruptcy judge will likely have to address whether the FDIC has a valid claim against the bankrupt company, whether the FDIC should be first in line to be paid back, and whether the agency can use the money to offset its own potential claims. The FDIC hasn’t filed a claim against SVB Financial yet, according to court records. "The ensuing litigation may conclusively resolve issues that have been extant since the Great Recession concerning the limit of the FDIC's authority over Banking Holding Companies and the responsibility that Banking Holding Companies have for the failure of their subsidiaries," Andrew T. Lolli, a Armstrong Teasdale LLP partner representing SVB Financial creditor Capital Markets Company LLC, said in an email. 'Driver's Seat' David Skeel, a law professor at the University of Pennsylvania, said it’s hard to challenge FDIC decision-making. While SVB Financial may get some of the cash back, it's likely to be on the FDIC’s timetable, he said. "I think the FDIC is in the driver's seat on this one," Skeel said in an email. "Not only is possession (in this case of the cash) nine-tenths of the law, as we used to say, but banking law gives the FDIC extraordinarily broad powers in the resolution context." The FDIC, via a receiver, froze the bank accounts holding the roughly $2 billion in March. SVB Financial kept the money in accounts with the Santa Clara, California-based Silicon Valley Bank before it was taken over by regulators. Silicon Valley Bank was the biggest bank to collapse in more than a decade and the second largest bank to fall under the agency's receivership, behind only Washington Mutual Inc., which imploded in 2008. Congress has empowered the FDIC as a receiver to withhold depositor funds in accounts to offset claims it may have against the bankrupt company, the FDIC said in court papers. Clifford J. White, a former director of the US Trustee's office, said a bankruptcy court will have to wade through both legal and factual issues. "I would not bet against the primacy of the FDIC' mandate to protect the deposit insurance system," White said. Skeel noted that there's historically been friction between bank regulators and bankrupt bank holding companies because of their conflicting interests, dating back to the savings and loan crisis in the 1980s. "In the earlier cases, holding companies were reluctant to funnel money to troubled banks," Skeel said. "Bank regulators subsequently persuaded Congress to amend the bankruptcy laws to force holding companies to honor agreements to support a bank—this is something that may be becoming an issue in the SVB situation." Bondholders have disputed the FDIC's claims to the $2 billion. In addition to the $3.3 billion bond debt, SVB Financial has about $3.7 billion of preferred equity outstanding. "We don't believe that it's the case that the FDIC has the right to recover a shortfall," Marshall Huebner of Davis Polk & Wardwell LLP, who represents a large group of senior noteholders, said at SVB's bankruptcy court hearing last month. Venue Issues The FDIC has suggested that courts don't have jurisdiction over the dispute until a claimant has exhausted the FDIC's own exclusive administrative claims process, citing the Financial Institutions Reform, Recovery and Enforcement Act of 1989. SVB Financial hasn't exhausted that process, the FDIC has said. FDIC receiver attorney Kurt F. Gwynne of Reed Smith LLP said during a March 2023 bankruptcy court hearing for SVB Financial that it's "premature" to say whether the agency will submit a claim in the Chapter 11 case. Tom Lauria, a lawyer representing a SVB Financial bondholder and shareholder Appaloosa Management, said at a court hearing last month that resolving the issue via the FDIC’s claims process could take years. "This case doesn't have years to get to resolution," Lauria said. 'Source of Strength' Silicon Valley Bank wasn't large enough to have a "living will" on file with the Federal Reserve, which would have promised financial support to a subsidiary bank under certain circumstances. It's not clear yet whether there are liquidity agreements or other guarantees between the bank and its parent company that could support the FDIC's case. However, the public portion of the bank’s 2022 resolution plan said SVB Financial "serves as a source of strength" for the bank, which included supporting its growth opportunities. The FDIC has lost such battles before. In 2010, an Alabama bankruptcy judge blocked an FDIC push to retrieve nearly $905 million against the bankrupt holding company of Colonial BancGroup Inc., rejecting FDIC claims that the company promised to maintain capital at its failed bank subsidiary. The FDIC could cite part of the bankruptcy code that says debtors must immediately cure any deficit under "any commitment by the debtor" to a federal banking agency, including the FDIC, John Popeo, a former FDIC lawyer and now a partner at Gallatin Group, which advises banks and other firms on regulatory issues, said in an email. But it's unclear whether an enforceable "commitment" exists under the meaning of the code, and courts have looked to written agreements for guidance, Popeo said. The FDIC could argue SVB Financial has a commitment because it’s required to provide financial support under 2010’s Dodd-Frank Act, Popeo said. The doctrine requires that a bank holding company serve as a source of financial strength to a subsidiary depository institution in financial distress, he said. "This issue will be a test for the source of strength doctrine following its codification in the Dodd-Frank Act," Popeo said. In the Chapter 11 of Washington Mutual Bank’s holding company, the FDIC, the bank’s receiver, and buyer JPMorgan Chase & Co. reached a global resolution on creditor priorities. But the odds favored the debtor in that case, said Joseph Cioffi, a partner at Davis+Gilbert, said in an email. Usually, there's a presumption that amounts on deposit in the debtor’s name are the bankruptcy estate's property, Cioffi said. But the FDIC moved to seize the SVB Financial funds on deposit before the bankruptcy case. "The FDIC appears to be taking a more aggressive and less deferential stance than it has in the past, for example in the bankruptcy of WaMu's corporate parent, by transferring funds to itself pre-petition," Cioffi said. About SVB Financial Group SVB Financial Group is a financial services company focusing on the innovation economy, offering financial products and services to clients across the United States and in key international markets. Prior to March 10, 2023, SVB Financial Group owned and operated Silicon Valley Bank, a state-chartered bank. During the week of March 6, 2023, Silicon Valley Bank, Santa Clara, CA, experienced a severe "run-on-the-bank." On the morning of March 10, the California Department of Financial Protection and Innovation seized SVB and placed it under the receivership of the Federal Deposit Insurance Corporation. SVB was the nation's 16th largest bank and the biggest to fail since the 2008 financial meltdown. On March 17, 2023, SVB Financial Group sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 23-10367). The Hon. Martin Glenn is the bankruptcy judge. The Debtor had assets of $19,679,000,000 and liabilities of $3,675,000,000 as of Dec. 31, 2022. Centerview Partners LLC is the financial advisor, Sullivan & Cromwell LLP proposed legal counsel and Alvarez & Marsal proposed restructuring advisor to SVB Financial Group as debtor-in-possession. Kroll is the claims agent. TRANS-LUX CORP: Yang Liu Quits as Director; Two New Directors Named ------------------------------------------------------------------- Trans-Lux Corporation disclosed in a Form 8-K filed with the Securities and Exchange Commission that the Company accepted the resignation of Yang Liu from the position of director of the Company. Mr. Liu's departure was not the result of any disagreement related to any matter involving the Company's operations, policies or practices. On April 21, 2023, Trans-Lux Corporation announced the appointments of Marco Elser and Jie Feng as directors of the Company. Neither Mr. Elser or Mr. Feng is a party to any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K except with respect to (i) Mr. Elser, his position as investment manager under which he exercises voting and dispositive power at Carlisle Investments Inc, with whom the Company owes $1.0 million of loans and $630,000 of accrued interest, and (ii) Mr. Feng, his employment with Unilumin, the Company's largest stockholder. There are no arrangements or understandings between Messrs. Elser and Feng and any other person pursuant to which such individuals were selected as a director. Messrs. Elser and Feng will be entitled to the compensation the Company offers its other non-employee directors from time to time, including any annual retainers and equity compensation. About Trans-Lux Headquartered in New York, New York, Trans-Lux Corporation -- http://www.trans-lux.com-- designs and manufactures TL Vision digital video displays for the financial, sports and entertainment, gaming, education, government, and commercial markets. With a comprehensive offering of LED Large Screen Systems, LCD Flat Panel Displays, Data Walls and scoreboards (marketed under Fair-Play by Trans-Lux), Trans-Lux delivers comprehensive video display solutions for any size venue's indoor and outdoor display needs. As of Dec. 31, 2022, the Company had $9.41 million in total assets, $19.74 million in total liabilities, and a total stockholders' deficit of $10.32 million. New Haven, CT-based Marcum LLP, the Company's auditor since 2015, issued a "going concern" qualification in its report dated March 31, 2023, citing that Company has a significant working capital deficiency, has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. TULEYRIES LAND: Hits Chapter 11 Bankruptcy Protection ----------------------------------------------------- The Tuleyries Land Holdings LLC filed for chapter 11 protection in the Western District of Virginia. The Debtor owns the property at 136 Tuleyries Lane, at Boyce, VA 22620, valued at $5.2 million, based on a recent offer. The petition states that funds will not be available to unsecured creditors. About The Tuleyries Land Holdings Tuleyries Land Holdings LLC filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Va. Case No. 23-50177) on April 11, 2023. In the petition filed by Robert Maxwell Emma, as manager and member, the Debtor reported total assets of $5,204,500 and total liabilities of $2,407,410. The Debtor is represented by: H. David Cox, Esq. Cox Law Group, PLLC 8 Barnett St Berryville, VA 22611 Email: david@coxlawgroup.com UKG INC: S&P Alters Outlook to Negative, Affirms 'B-' LT ICR ------------------------------------------------------------ S&P Global Ratings affirmed all of its ratings on UKG Inc., including the 'B-' long-term issuer credit rating and the issue-level ratings on its debt, and S&P revised the rating outlook to negative from stable. The negative outlook reflects the potential for lower ratings if expected revenue growth and profitability improvements do not materialize and operating performance is insufficient to support sustained deleveraging and improving levels of free cash flow generation, which S&P considers necessary for the company to maintain its debt obligations and satisfy ongoing liquidity requirements. S&P said, "Despite UKG's high debt leverage and cash flow deficit, we affirmed our ratings because we believe these metrics will show improvement in the coming quarters. The affirmation of our ratings on UKG largely reflects our expectation that UKG has good prospects to deliver robust revenue growth and enhanced profitability in the coming quarters to support ongoing deleveraging and growing free cash flow. In our view, this is sufficient to offset the company's high debt leverage and lack of free cash flow generation." The outlook revision considers that UKG's operating performance could be adversely impacted by weaker macroeconomic conditions, inflationary pressures, and rising interest rates, and it reflects a very limited cushion for the company to underperform against these expectations. UKG continues to maintain weak credit metrics and has yet to establish a track record generating positive free cash flow, which overshadows its strong growth in bookings and subscription revenues. UKG achieved a roughly 15% revenue increase in fiscal 2022, driven by growth in subscription revenue, despite adverse impacts from the KPC ransomware attack and subscription service credits provided to affected customers. In the first quarter of fiscal 2023, UKG maintained strong booking activity, which led to an approximately 18% increase in revenue compared to the same quarter the previous year. The company's EBITDA margins in the first quarter also experienced a improvement, climbing to around 19.5%. This growth represents a roughly 160 basis point (bps) sequential increase and an approximately 210 bps year-over-year improvement, which can be attributed to enhanced operating leverage and the diminishing impact of one-time costs associated with the prior year's KPC ransomware incident remediation. That said, improvements in profitability have yet to translate into positive free cash flow generation as UKG generated negative $208 million of free cash flow in the first quarter of fiscal 2023, a comparatively larger deficit than the negative $155 million posted in the same period a year earlier and negative $24 million generated in fiscal 2022. As a result, this required UKG to borrow an incremental $140 million on its revolving credit facility, and its leverage remained very high at around 12.4x for the 12 months ended Dec. 31, 2022, compared to around 13.2x for the 12 months ended Sept. 30, 2022. UKG's liquidity position has weakened considerably, but sources still support our adequate assessment. At the end of the first quarter of fiscal 2023, three months ended Dec. 31, 2022, UKG's cash balance stood at $95 million, considerably less than the $246 million held during the same period the previous year. This decline includes the company's growing utilization of its revolving credit facility, which had approximately $180 million of outstanding borrowings as of this period, compared to being undrawn a year ago. While this utilization level would have subjected the company to the springing covenant test, we believe that based on the permitted add-back under the credit agreement, UKG would have had a sufficient cushion to comply with the maximum leverage requirements under the covenant. Still, UKG prudently obtained incremental commitments to expand the facility from $425 million-$545 million, keeping utilization below the levels requiring a covenant test. S&P said, "Furthermore, given that the first quarter is UKG's most working capital-intensive period, and considering our projection for the company to generate positive free cash flow in 2023, we anticipate this to be the low point in UKG's liquidity metrics. As such, we expect cash balances to increase and revolver utilization to decrease as fiscal 2023 progresses." S&P said, "We believe profitability and cash flow generation to turn the corner in the second quarter of 2023 and continue to improve in 2024.Despite UKG generating negative $208 million in free cash flow in the first quarter, we still expect the company to generate positive free cash flow for the year. This assumes the company's working capital requirements remain consistent with historical patterns and includes our expectations for solid revenue growth and improving profitability. Key drivers supporting our revenue assumptions include UKG's large addressable market opportunity, multiple growth factors, including the shift towards recurring subscription revenue and continued annual contract value (ACV) growth with contractual pricing escalators, and UKG's historically strong retention rates. We also see UKG end-of-life announcements and its shift from selling individual products to selling its Pro and Ready platforms supporting efforts to upsell existing customers. Moreover, improved scale, greater proportions of higher margin subscription revenues, reduced implementation incentives, and the roll-off of one-time costs underpin our profitability expectations and is the primary driver behind our forecast for reduced leverage and sequential cash flow generation improvements over the coming quarters. Even so, in 2023, the free cash flow we are projecting still appears insufficient to cover mandatory debt amortization and employee equity program-related spending. "Macroeconomic conditions represent potential downside risks to our base-case expectations. We believe that as more and more organizations incorporate human capital into their operating strategies, UKG's workforce offerings are becoming increasingly essential. That being said, we do not expect the company to be immune to weaker macroeconomic conditions, given the correlation between demand for these solutions and economic indicators, including unemployment levels, IT spending, consumer confidence levels, and the overall economic health of current and prospective customers. In addition, we think the company is subject to considerable interest rate risk, despite utilizing financial hedges on a portion of the principal outstanding and earning interest income on the payroll deposits held on behalf of customers. Given the company's high debt leverage, lack of meaningful cash flow generation, and deteriorating liquidity position, UKG may have limited flexibility to withstand even a modest uptick in customer churn and sales elongation or shrinking payroll deposits. At the same time, we recognize that contractional protections and revenue visibility from its recurring subscriptions, coupled with cost structure flexibility and the ability to scale back growth investments would likely offset some of the negative impacts of a more challenging environment. Although these attributes make it hard to quantify the impacts of these risks, it would likely negatively impact our expectations for deleveraging and cash flow generation embedded in our base-case forecast. "The negative outlook reflects the potential for lower ratings if expected revenue growth and profitability improvements do not materialize and operating performance is insufficient to support sustained deleveraging and improving levels of free cash flow generation, which we consider necessary for the company to maintain its debt obligations and satisfy ongoing liquidity requirements." S&P could lower the rating if it views UKG's capital structure as unsustainable as evidenced by the following factors: -- The company continues to generate negative free cash flow over the coming quarters, and based on its operating prospects, S&P does not expect it to generate positive free cash flow above debt amortization; or -- Its current liquidity position continues to deteriorate, possibly due to revenue declines and lower-than-expected profitability, increased net cash interest expenses, or larger-than-expected cash outflows to support the company's restricted stock unit (RSU) equity program. S&P could revise the outlook to stable if UKG generates operating performance at or above its expectations over the next twelve months and with this it gains increased confidence in its ability to generate positive free cash flow in excess of debt amortization at growing levels. ESG credit indicators: E-2, S-2, G-3 S&P said, "Governance factors remain a moderately negative consideration in our credit rating analysis of the company, as is the case for most rated entities owned by private-equity sponsors. We believe UKG Inc.'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. Social factors have become a negative consideration in our credit rating analysis of UKG as the company fell victim to a ransomware attack in December 2021. However, as swift remediation efforts and access to cyber insurance have helped it weather the fallout to date, these social risks have not negatively influenced our rating on the company." UNION CIGAR: Seeks Cash Collateral Access ----------------------------------------- Union Cigar, LLC asks the U.S. Bankruptcy Court for the Middle District of Pennsylvania for authority to use cash collateral and provide adequate protection. The Debtor requires the use of cash collateral to continue its operations. PeoplesBank is believed to hold a first priority security interest in the personal property of the Debtor, including inventory and accounts. Coolidge Capital, LLC is believed to hold a second priority security interest in the future sales of the Debtor and possibly in the accounts of the Debtor. The Debtor does not currently have any accounts receivables. Also based upon the value of the assets, the Debtor believes Coolidge is not a secured creditor. PeoplesBank holds a first security interest in cash collateral in the approximate amount of $58,113. Further, it is believed PeoplesBank has a third priority security interest in Cash Collateral in the approximate amount of $53,113. Coolidge may hold a second priority security interest in cash collateral in the approximate amount of $12,250. In order to provide adequate protection to PeoplesBank and Coolidge, the Debtor proposes to provide each of PeoplesBank and Coolidge with replacement liens in post-petition cash collateral, and all other assets in which each may have a pre-Petition security interest and lien, only to the extent that the Lenders are secured in pre-petition cash collateral. The replacement lien will only be effective to the extent there is a diminution in the amount of cash collateral post-Petition. To the extent that such replacement liens are insufficient and PeoplesBank or Coolidge may have a shortfall resulting any diminution resulting from the Debtor's use of cash collateral and all other categories of assets upon which PeoplesBank or Coolidge have pre-Petition liens, and to the extent PeoplesBank or Coolidge are secured in cash collateral, PeoplesBank and Coolidge will be granted administrative claims superior in priority to all other administrative claims except for claims of professionals in the case and fees owed to the Office of the U.S. Trustee. The replacement liens will be effective without further recordation and will have the same priority as exists pre-Petition. A copy of the motion is available at https://bit.ly/44194Ke from PacerMonitor.com. About Union Cigar, LLC Union Cigar, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Pa. Case No. 1:23-bk-00873-HWV) on April 20, 2023. In the petition signed by John-Waite, Weiser, manager, the Debtor disclosed up to $1 million in both assets and liabilities. Robert E. Chernicoff, Esq., at Cunningham, Chernicoff & Warshawsky PC, represents the Debtor as legal counsel. UNITED PF: Moody's Lowers CFR to Caa2 & First Lien Debt to Caa1 --------------------------------------------------------------- Moody's Investors Service downgraded United PF Holdings, LLC's Corporate Family Rating to Caa2 from B3 and Probability of Default Rating to Caa2-PD from B3-PD. Concurrently, Moody's downgraded the ratings for the company's first lien senior secured credit facilities (revolver and term loan) to Caa1 from B2, and downgraded the rating for its second lien term loan to Ca from Caa2. The outlook is negative. The CFR downgrade to Caa2 reflects much weaker than expected operating performance in FY22, expectation for very weak liquidity in FY23 even with an anticipated improvement in revenue and earnings due to the depletion of the once sizable cash balance that will potentially lead to revolver borrowings as the year progresses to fund negative free cash flow. Moody's views the company's capital structure with a high debt load ($744 million outstanding as of year-end 2022) and heavy interest expense burden as becoming increasingly unsustainable without a meaningful earnings improvement. United PF's lease adjusted debt-to-EBITDA leverage (without any ran-rate adjustment) was about 10x for the LTM period ended December 31, 2022, which is very high for its business profile. United PF grew revenue and earnings in 2022 but at lower rates than anticipated and this contributed to high leverage and a sizable free cash flow deficit that reduced the cash balance. Rising labor costs without a corresponding increase in membership rates are contributing to a meaningfully lower EBITDA margin that is not being made up through higher membership volumes. Lower cash and negative free cash flow constrains the company's investment flexibility. Moody's expect a lower capital spending requirement over the next three years. However, even with reduced capital spending, free cash flow is expected to remain negative in the $20 to $30 million range (before the required $6.45 million of amortization for its first lien term loan) in FY23. At year-end 2022, the company had $22.7 million of cash vs $81 million at year-end 2021, a decrease of $58 million. Moody's believes the company will need to draw on revolver in 2H2023 to fund its operations. United PF is benefitting from an interest rate hedge on roughly $500 million of term loans that is partially shielding the company from rising rates, but interest expense is likely to increase meaningfully when the hedge expires in November 2024. Additionally, the company's free cash flow track record is weak because of significant investment in new store growth including pre-pandemic in FY18 and FY19 when EBITDA was higher and interest rates were lower. Furthermore, the company's $40 million revolver (currently undrawn; expires in December 2024) becomes current in December this year, and will present refinancing risk if borrowings increase and earnings do not improve. The likelihood of a distressed exchange or restructuring event is increasing over the next 12 to 18 months without additional equity support from its sponsor. Moody's took the following rating actions: Issuer: United PF Holdings, LLC Corporate Family Rating, downgraded to Caa2 from B3 Probability of Default Rating, downgraded to Caa2-PD from B3-PD Senior Secured First Lien Revolving Credit Facilities (revolver and term loans), downgraded to Caa1 (LGD3) from B2 (LGD3) Senior Secured Second Lien Term Loan, downgraded to Ca (LGD6) from Caa2 (LGD6) Outlook Actions: Issuer: United PF Holdings, LLC Outlook, revised to Negative RATINGS RATIONALE United PF's Caa2 CFR broadly reflects its very high leverage (Moody's lease adjusted debt/EBITDA of about 10x at year end 2022), very weak liquidity and Moody's view of an increasingly unsustainable capital structure without a meaningful earnings improvement. The chance of a distressed exchange or other restructuring has increased significantly. The rating is also constrained by the company's small scale in terms of revenue as well as the high business risk of the fragmented and competitive fitness club industry given its low barriers to entry, exposure to cyclical shifts in discretionary consumer spending, and high attrition rates. In addition, the rating reflects the event and financial policy risk due to private equity ownership. United PF's capital spending requirement is high and restricts free cash flow generation to meet the new club opening and equipment purchase obligations under its agreements with Planet Fitness. However, the ratings are supported by the company's franchise relationship with Planet Fitness, which has a well-recognized national brand name. United PF is the largest franchise operator within the Planet Fitness system. The rating also benefits from longer term favorable demographic trends such as the increased focus on health and fitness. United PF's governance profile score (IPS) risk has been revised from highly negative (G-4) to very highly negative (G-5) reflecting increased likelihood of distressed exchange event and a revision to the financial strategy and risk management score to very highly negative from highly negative. As a result, Moody's also changed the credit impact score to CIS-5 from CIS-4. Governance risk also reflects the company's aggressive financial policy and concentrated decision making under ownership by private equity firm American Securities LLC. The financial policies include a tolerance for high leverage, and historically aggressive growth strategy. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The negative outlook reflects Moody's view that negative free cash flow and an increasingly unsustainable capital structure with a high debt load, heavy interest expense burden and reinvestment needs could increase debt restructuring risk if earnings do not improve over the next year. Ratings could be upgraded if improved operating performance results in significantly lower leverage, positive free cash flow that funds reinvestment needs, and stronger liquidity including successfully addressing its December 2024 revolver expiration. A sponsor equity injection that funds debt reduction could also lead to an upgrade. The ratings could be downgraded if the company's operating performance does not improve, free cash flow remains negative, the likelihood of a distressed exchange event or reorganization event increases, or recovery values deteriorate. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. Headquartered in Austin, TX, United PF is the US's largest Planet Fitness franchisee. As of December 31, 2022, United PF owns and operates 186 Planet Fitness clubs serving about 1.09 million members in 14 different states. FY2022 actual revenue was about $256 million. The company has been owned by American Securities LLC since December 2019. URBAN COMMONS: Amends Plan to Include Other Priority Claims ----------------------------------------------------------- Urban Commons 2 West LLC, and its Debtor Affiliates submitted a Second Amended Disclosure Statement describing Second Amended Plan dated April 24, 2023. The Plan provides a means by which the Debtors' main assets will be liquidated through the Sale. The Plan further provides that the proceeds of such liquidation, together with the Debtors' Cash and Causes of Action, will be distributed under Chapter 11 of the Bankruptcy Code, and sets forth the treatment of all Claims against, and interests in, the Debtors. The Plan provides for payments on Allowed Claims in accordance with the priorities for claims as set forth under the Bankruptcy Code. The Plan will primarily be funded with the Debtors' Cash and sale of the Hotel Interest. The Plan may also be funded with Litigation Proceeds, if any, and the net proceeds from the liquidation of any other assets of the Debtors. Class 1 consists of the Secured Claims of BPC Lender. The holder of the Allowed Class 1 Claims shall receive (a) all net Cash proceeds from the Sale after payment of (i) the Allowed Claims of BPC DIP Lender, LLC, (ii) all Allowed Cure Claims and (iii) the Broker Fee plus (b) 50% of the Litigation Proceeds up to 100% of their Allowed Class 1 Claim. The balance of the Class 1 Creditor's claims shall be deemed Class 5 Claims for voting, but not distribution purposes. The amount of claim in this Class total $109,641,603.69. Class 4 consists of Other Priority Claims. Holder of Allowed Class 4 Claims shall receive up to 100% of their Allowed Claims from 50% of the Litigation Proceeds and (b) Available Cash remaining after payment of Allowed Administrative Claims, Allowed Secured Claims (to the extent provided for under the Plan), Allowed Priority Tax Claims, U.S. Trustee Fees, and Post - Effective Date Administrative Claims. Class 5 consists of General Unsecured Claims. Holders of Allowed Class 5 Claims will receive, in full and final satisfaction, compromise, settlement and release of the Allowed General Unsecured Claims, a Pro Rata Distribution from (a) 50% of the Litigation Proceeds and (b) Available Cash remaining after payment of Allowed Administrative Claims, Allowed Secured Claims (to the extent provided for under the Plan), Allowed Priority Tax Claims, U.S. Trustee Fees, Allowed Other Priority Claims and Post-Effective Date Administrative Claims up to 100% of their Allowed Claims in one or more Distributions as determined by the Plan Administrator on a date(s) to be determined by the Plan Administrator in full and final satisfaction of all Class 5 Claims. The allowed unsecured claims total $10,000,000. The Plan will primarily be funded with the net sale proceeds of the Hotel Interests pursuant to the Sale and the Sale Order, the Debtors' cash on hand, the Administrative and Unsecured Carveouts and Litigation Proceeds, if any, together with the net proceeds from the liquidation and/or turnover of any other assets of the Debtors. Distributions shall be made by the Plan Administrator. The Bankruptcy Code has scheduled May 30, 2023 at 10:00 a.m. as the hearing to consider confirmation of the Plan. A full-text copy of the Second Amended Disclosure Statement dated April 24, 2023 is available at https://bit.ly/3AtMWKV from PacerMonitor.com at no charge. Debtors' counsel: Robert L. Rattet, Esq. DAVIDOFF HUTCHER & CITRON LLP 605 Third Avenue 34th Floor New York, NY 10158 Tel: 212-557-7200 Fax: 212 286 1884 Email: rlr@dhclegal.com About Urban Commons 2 West Urban Commons 2 West, LLC, a company in Corona Del Mar, Calif., and its affiliates, filed voluntary petitions for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 22-11509) on Nov. 15, 2022. At the time of the filing, Urban Commons 2 West listed as much as $100 million to $500 million in both assets and liabilities. Judge Philip Bentley oversees the cases. Davidoff Hutcher & Citron, LLP and Getzler Henrich & Associates, LLC serve as the Debtor's legal counsel and restructuring advisor, respectively. Mark Podgainy, a partner at Getzler, is the Debtor's chief restructuring officer. VISTAM INC: Commences Subchapter V Bankruptcy Proceeding -------------------------------------------------------- Vistam Inc. filed for chapter 11 protection in the District of Central California. The Debtor elected on its voluntary petition to proceed under Subchapter V of chapter 11 of the Bankruptcy Code. The Debtor is a corporation operating as an electrical contracting company located at 2375 Walnut Avenue, Signal HIll, California 90755. According to court filings, Vistam Inc. has $939,286 in debt`to 1 to 49 creditors. The petition states that funds will be available to unsecured creditors. A meeting of creditors under 11 U.S.C. Section 341(a) is slated for May 3, 2023 at 2:00 p.m. at UST-LA2 Telephonically on telephone conference line: 1-866-816-0394 (participant passcode: 5282999). About Vistam Inc. Vistam Inc. is a provider of engineering and technical services. Vistam Inc. filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-12137) on April 10, 2022. In the petition filed by Desmond D'Souza, as member, the Debtor reported total assets of $695,107 and total liabilities of $1,082,731. The Honorable Bankruptcy Judge Neil W Bason oversees the case. Moriah Douglas Flahaut has been appointed as Subchapter V trustee. The Debtor is represented by: Selwyn Whitehead, Esq. Law Office of Selwyn D. Whitehead 2375 Walnut Avenue Signal Hill, CA 90755 Tel: (212) 675-6161 Fax: (212) 675-4367 Email: gmf@lawgmf.com WEWORK INC: Falls Short of Nasdaq Minimum Bid Price Requirement --------------------------------------------------------------- WeWork Inc. announced that on April 12, 2023, it received a notice from the New York Stock Exchange notifying the Company that it is not in compliance with the NYSE's continued listing standards because as of April 11, 2023, the average closing price of the Company's Class A Common Stock was less than $1.00 per share over a consecutive 30 trading-day period. The Notice does not result in the immediate delisting of the Company's Common Stock from the NYSE. The Company intends to respond to the NYSE affirming its intent to cure the deficiency. Pursuant to the NYSE's rules, the Company has a six-month period following receipt of the Notice to regain compliance with the NYSE's minimum share price requirement. The Company intends to consider a number of available alternatives to cure its non-compliance with the applicable price criteria in the NYSE's continued listing standards. The Company can regain compliance with the minimum share price requirement at any time during the six-month cure period if, on the last trading day of any calendar month during the cure period or on the last day of the cure period, the Company has (i) a closing share price of at least $1.00, and (ii) an average closing share price of at least $1.00 over the 30 trading-day periods ending on the last trading day of that month. The Company's Common Stock will continue to be listed and trade on the NYSE during this period, subject to its compliance with other NYSE continued listing standards. The receipt of the Notice does not affect the Company's business, operations or reporting requirements with the Securities and Exchange Commission. About WeWork New York-based WeWork Inc. (NYSE: WE) -- wework.com -- is a global flexible workspace provider, serving a membership base of businesses large and small through its network of 779 Systemwide Locations, including 622 Consolidated Locations as of December 2022. WeWork reported a net loss of $2.29 billion for the year ended Dec. 31, 2022, a net loss of $4.63 billion for the year ended Dec. 31, 2021, a net loss of $3.83 billion in 2020, and a net loss of $3.77 billion in 2019. As of Dec. 31, 2022, the Company had $17.86 billion in total assets, $21.31 billion in total liabilities, and a total deficit of $3.43 billion. The Company has been executing a strategic plan to transform its business over the last three years. The Company said it will continue to execute its operational restructuring program in 2023 and take additional actions to further this strategic plan which to date has included robust expense management efforts, material real estate portfolio optimization and the exit of non-core businesses, contributing to an improvement in its net loss from operations of $4.3 billion for the year ended Dec. 31, 2020 to $1.6 billion for the year ended Dec. 31, 2022. [^] Recent Small-Dollar & Individual Chapter 11 Filings ------------------------------------------------------- In re New Generation International Church Bankr. S.D. Ala. Case No. 23-10868 Chapter 11 Petition filed April 18, 2023 See https://www.pacermonitor.com/view/SFP3LPY/New_Generation_International_Church__alsbke-23-10868__0001.0.pdf?mcid=tGE4TAMA Filed Pro Se In re MKC Food Future LLC Bankr. C.D. Cal. Case No. 23-12298 Chapter 11 Petition filed April 18, 2023 See https://www.pacermonitor.com/view/R3IC6VQ/MKC_Food_Future_LLC__cacbke-23-12298__0001.0.pdf?mcid=tGE4TAMA Filed Pro Se In re Custom Spray Systems, Inc. Bankr. E.D. Cal. Case No. 23-90166 Chapter 11 Petition filed April 18, 2023 See https://www.pacermonitor.com/view/RSZAVZQ/Custom_Spray_Systems_Inc__caebke-23-90166__0001.0.pdf?mcid=tGE4TAMA represented by: David C. Johnston, Esq. DAVID C. JOHNSTON E-mail: david@johnstonbusinesslaw.com In re Allan Ward Spear, III and Vivian Spear Bankr. N.D. Fla. Case No. 23-10072 Chapter 11 Petition filed April 18, 2023 represented by: Justin Luna, Esq. In re Jay Christopher Ewy Bankr. D. Kan. Case No. 23-10365 Chapter 11 Petition filed April 18, 2023 represented by: Justice King, Esq. In re Lantern 18, LLC Bankr. D. Mass. Case No. 23-10592 Chapter 11 Petition filed April 18, 2023 See https://www.pacermonitor.com/view/JRA7ELQ/Lantern_18_LLC__mabke-23-10592__0001.0.pdf?mcid=tGE4TAMA represented by: Carl D. Aframe, Esq. AFRAME & BARNHILL, P.A. E-mail: aframe@aframebarnhill.net In re Starr General Contracting Corporation Bankr. D.N.J. Case No. 23-13205 Chapter 11 Petition filed April 18, 2023 See https://www.pacermonitor.com/view/BEQDP6I/Starr_General_Contracting_Corporation__njbke-23-13205__0001.0.pdf?mcid=tGE4TAMA represented by: David A. Kasen, Esq. KASEN & KASEN, P.C. E-mail: dkasen@kasenlaw.com In re JJS Transportation & Distribution Co., Inc. Bankr. E.D.N.Y. Case No. 23-71306 Chapter 11 Petition filed April 18, 2023 See https://www.pacermonitor.com/view/XEZMNFQ/JJS_Transportation__Distribution__nyebke-23-71306__0001.0.pdf?mcid=tGE4TAMA Filed Pro Se In re O'Dar Group, LLC Bankr. W.D.N.Y. Case No. 23-10349 Chapter 11 Petition filed April 18, 2023 See https://www.pacermonitor.com/view/26EUAOQ/ODar_Group_LLC__nywbke-23-10349__0001.0.pdf?mcid=tGE4TAMA represented by: Robert B. Gleichenhaus, Esq. GLEICHENHAUS, MARCHESE & WEISHAAR, P.C. In re Frank J Janiszewski and Pamela J Janiszewski Bankr. E.D. Wisc. Case No. 23-21696 Chapter 11 Petition filed April 18, 2023 represented by: Virginia George, Esq. In re Tyrious LaMonte Gates Bankr. N.D. Cal. Case No. 23-30247 Chapter 11 Petition filed April 19, 2023 represented by: Lewis Phon, Esq. In re Eric Ralls Bankr. D. Colo. Case No. 23-11620 Chapter 11 Petition filed April 19, 2023 represented by: Jeffrey Brinen, Esq. In re Rui De Lima Carneiro Bankr. S.D. Fla. Case No. 23-13048 Chapter 11 Petition filed April 19, 2023 represented by: Stan Riskin, Esq. ADVANTAGE LAW GROUP, P.A. E-mail: stan.riskin@gmail.com In re F. Scott Enterprises, LLC Bankr. E.D. Ky. Case No. 23-20280 Chapter 11 Petition filed April 19, 2023 See https://www.pacermonitor.com/view/Y2B523I/F_Scott_Enterprises_LLC__kyebke-23-20280__0001.0.pdf?mcid=tGE4TAMA represented by: Michael B. Baker, Esq. THE BAKER FIRM, PLLC E-mail: mbaker@bakerlawky.com In re A-Cam Apts LLC Bankr. D.N.J. Case No. 23-13254 Chapter 11 Petition filed April 19, 2023 See https://www.pacermonitor.com/view/JWF4M5A/A-Cam_Apts_LLC__njbke-23-13254__0001.0.pdf?mcid=tGE4TAMA represented by: Marc C. Capone, Esq. GILLMAN, BRUTON & CAPONE, LLC E-mail: mcapone@gbclawgroup.com In re 642 E 105 Development Corp. Bankr. E.D.N.Y. Case No. 23-41335 Chapter 11 Petition filed April 19, 2023 See https://www.pacermonitor.com/view/S2RTIDA/642_E_105_Development_Corp__nyebke-23-41335__0001.0.pdf?mcid=tGE4TAMA Filed Pro Se In re 642 E 105 Development Corp. Bankr. E.D.N.Y. Case No. 23-41335 Chapter 11 Petition filed April 19, 2023 See https://www.pacermonitor.com/view/S2RTIDA/642_E_105_Development_Corp__nyebke-23-41335__0001.0.pdf?mcid=tGE4TAMA Filed Pro Se In re Kings 828 Trucking, LLC Bankr. N.D. Tex. Case No. 23-41110 Chapter 11 Petition filed April 19, 2023 See https://www.pacermonitor.com/view/MAL5PEA/Kings_828_Trucking_LLC__txnbke-23-41110__0001.0.pdf?mcid=tGE4TAMA represented by: Eric A. Liepins, Esq. ERIC A. LIEPINS E-mail: eric@ealpc.com In re Little K's Landscaping, LLC Bankr. D. Conn. Case No. 23-30267 Chapter 11 Petition filed April 20, 2023 See https://www.pacermonitor.com/view/3EUI6QY/LITTLE_KS_LANDSCAPING_LLC__ctbke-23-30267__0001.0.pdf?mcid=tGE4TAMA represented by: Joseph J. D'Agostino, Jr., Esq. ATTORNEY JOSEPH J. D'AGOSTINO, JR., LLC E-mail: joseph@lawjjd.com In re Beth A. Henson Bankr. D. Md. Case No. 23-12719 Chapter 11 Petition filed April 20, 2023 represented by: Eric Steiner, Esq. In re Jram 429 LLC Bankr. E.D.N.Y. Case No. 23-41348 Chapter 11 Petition filed April 20, 2023 See https://www.pacermonitor.com/view/IJ2PBNQ/Jram_429_LLC__nyebke-23-41348__0001.0.pdf?mcid=tGE4TAMA Filed Pro Se In re M. Burton Marshall Bankr. N.D.N.Y. Case No. 23-60263 Chapter 11 Petition filed April 20, 2023 represented by: Jeffrey Dove, Esq. In re Union Cigar, LLC Bankr. M.D. Pa. Case No. 23-00873 Chapter 11 Petition filed April 20, 2023 See https://www.pacermonitor.com/view/MRPSKJA/Union_Cigar_LLC__pambke-23-00873__0001.0.pdf?mcid=tGE4TAMA represented by: Robert E. Chernicoff, Esq. CUNNINGHAM, CHERNICOFF & WARSHAWSKY PC In re R2&C, LLC Bankr. W.D. Pa. Case No. 23-20851 Chapter 11 Petition filed April 20, 2023 See https://www.pacermonitor.com/view/BNCXTWI/R2C_LLC__pawbke-23-20851__0001.0.pdf?mcid=tGE4TAMA represented by: Donald R. Calaiaro, Esq. CALAIARO VALENCIK E-mail: dcalaiaro@c-vlaw.com In re Anthony J. Kladitis Bankr. W.D. Pa. Case No. 23-10208 Chapter 11 Petition filed April 20, 2023 represented by: Donald R. Calaiaro, Esq. CALAIARO VALENCIK E-mail: dcalaiaro@c-vlaw.com In re Brinn-Heather Thomas Black Bankr. M.D. Tenn. Case No. 23-01418 Chapter 11 Petition filed April 20, 2023 represented by: Griffin Dunham, Esq. In re Michael T. Navin and Liga Mattics Navin Bankr. D. Ariz. Case No. 23-02594 Chapter 11 Petition filed April 21, 2023 represented by: Thomas H. Allen, Esq. ALLEN, JONES & GILES, PLC In re Pacific Pourhouse, LLC Bankr. N.D. Cal. Case No. 23-40464 Chapter 11 Petition filed April 21, 2023 See https://www.pacermonitor.com/view/7RQ4DJY/Pacific_Pourhouse_LLC_a_California__canbke-23-40464__0001.0.pdf?mcid=tGE4TAMA represented by: Ryan C. Wood, Esq. LAW OFFICES OF RYAN C. WOOD, INC. E-mail: Ryan@westcoastbk.com In re Maria Bancharan Bankr. E.D.N.Y. Case No. 23-71366 Chapter 11 Petition filed April 21, 2023 In re Corey Evan King Bankr. M.D. Tenn. Case No. 23-01433 Chapter 11 Petition filed April 21, 2023 represented by: Steven Lefkovitz, Esq. LEFKOVITZ & LEFKOVITZ, PLLC In re 2306 Burton Street LLC Bankr. E.D. Va. Case No. 23-31386 Chapter 11 Petition filed April 21, 2023 See https://www.pacermonitor.com/view/RJLFHEI/2306_Burton_Street_LLC__vaebke-23-31386__0001.0.pdf?mcid=tGE4TAMA Filed Pro Se In re Hypercube Films, Ltd. Liability Co. Bankr. C.D. Cal. Case No. 23-12463 Chapter 11 Petition filed April 23, 2023 See https://www.pacermonitor.com/view/4Q72RHA/Hypercube_Films_Ltd_Liability__cacbke-23-12463__0001.0.pdf?mcid=tGE4TAMA represented by: Michael Kwasigroch, Esq. LAW OFFICES OF MICHAEL D. KWASIGROCH E-mail: attorneyforlife@aol.com In re Gail Suzanne Marie Teymourian Bankr. N.D. Cal. Case No. 23-30259 Chapter 11 Petition filed April 23, 2023 represented by: Gregory A. Rougeau, Esq. BRUNETTI ROUGEAU LLP E-mail: grougeau@brlawsf.com In re Sandpiper Management, LLC Bankr. S.D. Cal. Case No. 23-01096 Chapter 11 Petition filed April 23, 2023 See https://www.pacermonitor.com/view/5O4FKWY/Sandpiper_Management_LLC__casbke-23-01096__0001.0.pdf?mcid=tGE4TAMA represented by: Jorge I. Hernandez, Esq. LAW OFFICE OF JORGE I. HERNANDEZ E-mail: jorge@jihlaw.com In re Luminous Mobile, LLC Bankr. E.D. Mich. Case No. 23-43724 Chapter 11 Petition filed April 23, 2023 See https://www.pacermonitor.com/view/4DRNZOI/Luminous_Mobile_LLC__miebke-23-43724__0001.0.pdf?mcid=tGE4TAMA represented by: Robert Bassel, Esq. Email: bbassel@gmail.com In re Ford City RX, LLC Bankr. N.D. Ala. Case No. 23-80761 Chapter 11 Petition filed April 24, 2023 See https://www.pacermonitor.com/view/GMQRN2Q/Ford_City_RX_LLC__alnbke-23-80761__0001.0.pdf?mcid=tGE4TAMA represented by: C. Taylor Crockett, Esq. C. TAYLOR CROCKETT, P.C. Email: taylor@taylorcrockett.com In re Medical Center Pharmacy, LLC Bankr. N.D. Ala. Case No. 23-80762 Chapter 11 Petition filed April 24, 2023 See https://www.pacermonitor.com/view/4LHDAJY/Medical_Center_Pharmacy_LLC__alnbke-23-80762__0001.0.pdf?mcid=tGE4TAMA represented by: C. Taylor Crockett, Esq. C. TAYLOR CROCKETT, P.C. Email: taylor@taylorcrockett.com In re Angie's Trucking, Inc. Bankr. S.D. Ala. Case No. 23-10912 Chapter 11 Petition filed April 24, 2023 See https://www.pacermonitor.com/view/A66LBJY/Angies_Trucking_Inc__alsbke-23-10912__0001.0.pdf?mcid=tGE4TAMA represented by: Frances Hoit Hollinger, Esq. FRANCES HOIT HOLLINGER, LLC Email: FranHollinger@aol.com In re Helaine E. Tessler Bankr. D. Ariz. Case No. 23-02612 Chapter 11 Petition filed April 24, 2023 represented by: Gary Ringler, Esq. In re Omar S. Orozco Bankr. N.D. Cal. Case No. 23-30260 Chapter 11 Petition filed April 24, 2023 represented by: Craig Winslow, Esq. In re Elizabeth Jane, Inc. Bankr. D. Md. Case No. 23-12802 Chapter 11 Petition filed April 24, 2023 See https://www.pacermonitor.com/view/5BROU2Q/Elizabeth_Jane_Inc__mdbke-23-12802__0001.0.pdf?mcid=tGE4TAMA represented by: Steven L. Goldberg, Esq. MCNAMEE HOSEA, P.A. Email: sgoldberg@mhlawyers.com In re OMG 4Real Properties, Inc. Bankr. W.D. Mo. Case No. 23-30126 Chapter 11 Petition filed April 24, 2023 See https://www.pacermonitor.com/view/SIZ7GMA/OMG_4Real_Properties_Inc__mowbke-23-30126__0001.0.pdf?mcid=tGE4TAMA represented by: Mariann Morgan, Esq. CHECKETT, PAULY, BAY & MORGAN, LLC Email: mam@cp-law.com In re Christopher Wayne Glenn Bankr. D.N.D. Case No. 23-30132 Chapter 11 Petition filed April 24, 2023 In re Tara N. Henley Bankr. E.D. Wash. Case No. 23-00486 Chapter 11 Petition filed April 24, 2023 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. TCR subscribers have free access to our on-line news archive. Point your Web browser to http://TCRresources.bankrupt.com/and use the e-mail address to which your TCR is delivered to login. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Philadelphia, Pa., USA. Randy Antoni, Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Joel Anthony G. Lopez, Psyche A. Castillon, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2023. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $975 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Peter A. Chapman at 215-945-7000. *** End of Transmission ***