/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/230501.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, May 1, 2023, Vol. 27, No. 120 Headlines 280 AURARIA: Court OKs Interim Cash Collateral Access ADLER GROUP: S&P Upgrades ICR to 'CCC+', Outlook Negative AEARO TECHNOLOGIES: Veterans Sue 3M to Stop Chapter 11 AEREOS PORTUGUESES: S&P Affirms 'B+' ICR, Outlook Stable AEROCARE MEDICAL: Hires Cross Law Firm P.L.C. as Counsel AIR CANADA: S&P Alters Outlook to Positive, Affirms 'BB-' ICR AMERICAN HVAC: Case Summary & 20 Largest Unsecured Creditors AMSTERDAM HOUSE: Wins Interim Cash Collateral Access ANTERO RESOURCES: S&P Alters Outlook to Pos., Affirms 'BB+' ICR ARCHDIOCESE OF NEW ORLEANS: Judge Guidry Won't Recuse From Case BADGER FINANCE: $268.7M Bank Debt Trades at 17% Discount BED BATH: Store Closing Sales Begin Across Stores Nationwide BEVERLY COMMUNITY: S&P Cuts 2015/2017 Revenue Bonds Rating to 'D' BIO365 LLC: Commences Subchapter V Bankruptcy Case BLACK DIAMOND: Seeks to Extend Exclusivity Period to June 21 BLACKSTONE MORTGAGE: Fitch Affirms BB LongTerm IDR, Outlook Stable BLINK CHARGING: Closes Envoy Acquisition in $35.5 Million Deal BRACKET INTERMEDIATE: Moody's Affirms 'B3' CFR on Refinancing BURGER BOSSCO: S&P Downgrades ICR to 'D' on Recapitalization C & A TRANSPORTATION: Wins Cash Collateral Access Thru May 31 CANOO INC: Signs $48 Million Securities Purchase Deal With YA II CASELLA WASTE: GFL Environmental Deal No Impact on Moody's Ba2 CFR CATALINA MARKETING: Court Confirms Prepackaged Reorganization Plan CLIENT FIRST: Two Creditors Say Liquidating Plan Not Feasible COHU INC: S&P Upgrades ICR to 'BB-', Outlook Stable COLEMAN COMMERCIAL: Small Business Plan Confirmed by Judge COMMUNITY CARE: $330M Bank Debt Trades at 18% Discount CORELOGIC INC: $750M Bank Debt Trades at 21% Discount CORNERSTONE ONSITE: Taps Bright Balance as Accountant CORONET CERAMICS: Starts Subchapter V Bankruptcy Proceeding COVENANT SOLAR: Hits Chapter 11 Bankruptcy Protection COVENANT SOLAR: Taps Michael Best & Friedrich as Legal Counsel CRAFTSMAN ROOFING: Court OKs Cash Collateral Access Thru May 3 CROWN FINANCE: $650M Bank Debt Trades at 82% Discount CYXTERA TECHNOLOGIES: Plans Sale, Capital Raise to Address Debt DAVID'S BRIDAL: Owes Vendors $27.5M as It Navigates Chapter 11 DAWN ACQUISITIONS: $550M Bank Debt Trades at 55% Discount DCL HOLDINGS: Taps Anthony Saccullo as Wind-Down Officer DESERT VALLEY: Taps Sacks Tierney as Substitute Counsel DFW GRANITE: Has Cash Collateral Access on Final Basis DIEBOLD NIXDORF: Further Extends Notes Exchange Offer Until May 5 DISH NETWORK: S&P Lowers ICR to 'CCC+' on Cash Flow Uncertainty DIV005 LLC: Endurance Assurance Says Plan Not Filed in Good Faith DOSHI ASSOCIATES: Amends Non-Insider Unsecured Claims Pay Details EL CASTILLO RETIREMENT: Fitch Affirms 'BB+' IDR, Outlook Stable ELECTRONICS FOR IMAGING: $875M Bank Debt Trades at 25% Discount EMERALD DEBT: Moody's Assigns First Time 'B1' Corp. Family Rating EMERALD ELECTRICAL: Taps Brett Wagner as Special Counsel EMERALD ELECTRICAL: Taps Hoover Slovacek as Appellate Counsel EPS PARLIN: Case Summary & Five Unsecured Creditors FARADAY FUTURE: Expects to Get Additional 180-Day NASDAQ Extension FJC MANAGEMENT: Unsecureds Will Get 7% to 9% Dividend in Plan FRANCO'S PAVING: Seeks to Hire Tran Singh as Counsel G.A.H. BAR-B-Q: Court OKs Cash Collateral Access Thru June 7 GENESIS GLOBAL: Taps M3 Advisory Partners as Financial Advisor GIGAMONSTER NETWORKS: Seeks to Extend Exclusivity to Sept. 13 GLOBAL MEDICAL: S&P Downgrades ICR to 'CCC+', Outlook Negative GOBO LTD: Court OKs Interim Cash Collateral Access GOODLIFE PHYSICAL: Court OKs Deal on Cash Collateral Access GRAVITY HOLDINGS: Unsecureds to Get $500 per Month for 60 Months GREENHEART NY: Unsecureds Will Get 20% of Claims over 5 Years HAWAIIAN HOLDINGS: AFA Nominates D. Akins as Replacement Director HEARTLAND DENTAL: S&P Rates New First-Lien Term Loan 'B-' HEMISPHERE MEDIA: Moody's Withdraws 'B2' Corporate Family Rating HIGH STREET: Subchapter V Plan Confirmed by Judge HIGHLAND CARGO: Hearing on Cash Collateral Bid Moved to June 6 INTERNAP HOLDING: Case Summary & 20 Largest Unsecured Creditors IVS COMM: Unsecured Creditors Will Get 10% of Claims over 5 Years KCW GROUP LLC: Taps Transwestern as Real Estate Broker KENAN ADVANTAGE: Moody's Rates New $250MM First Lien Loan 'B2' LARRET PROPERTIES: Unsecureds to be Paid in Full in 5 Years LEARFIELD COMMUNICATIONS: $864M Bank Debt Trades at 26% Discount LIFESCAN GLOBAL: S&P Downgrades ICR to 'CC', Outlook Negative LMBE-MC HOLDCO II: Moody's Reviews B1 Rating on Secured Loans MATLINPATTERSON GLOBAL: U.S. Trustee Says Disclosures Inadequate MERIDIAN HOLDING: Continued Operations to Fund Plan MERIDIEN ENERGY: Seeks $1.6MM DIP Loan from ICT-DIP MERISOL VILLAGES: June 5 Plan & Disclosure Hearing Set MIAMI JET TOURS: Unsecureds Will Get 2.58% of Claims in 5 Years MONITRONICS INT'L: Mulls 2nd Bankruptcy to Hand Control to Lenders MONTANA TUNNELS: Exclusivity Period Extended to June 5 NABIEKIM ENTERPRISES: Gets OK to Hire Fear Waddell as Legal Counsel NEW HAVEN TRUCK: Case Summary & 11 Unsecured Creditors NEXERA MEDICAL: Case Summary & 10 Unsecured Creditors OFFICE INTERIORS: Court OKs Interim Cash Collateral Access OXBOW CARBON: Moody's Rates 1st Lien Loans 'B1' & Hikes CFR to 'B1' OXBOW CARBON: S&P Upgrades ICR to 'BB-' on Stronger Credit Metrics PECF USS: S&P Alters Outlook to Negative, Affirms 'CCC+' ICR RADIATE HOLDCO: Moody's Cuts CFR to Caa1 & Sr. Secured Debt to B3 RED ROSE INC: Taps Garman Turner Gordon as Special Counsel REDSTONE HOLDCO 2: $450M Bank Debt Trades at 39% Discount RENNOVA HEALTH: Provides Update After 2022 Financial Statements RESTORATION HARDWARE: S&P Lowers ICR to 'BB-', Outlook Negative REVLON INC: To Choose New Board Chairman After Bankruptcy Exit RIVERBED HOLDINGS: Moody's Cuts CFR & Senior Secured Debt to Caa3 ROYAL BLUE REALTY: May Use $37,000 of Cash Collateral Thru June 30 SALE LLC: As Good as it Gets Cafe Files Subchapter V Case SAN BENITO HEALTH: Discusses Options for Future Financial Stability SCIENTIFIC GAMES: S&P Downgrades ICR to 'B' on Delayed Deleveraging SCST REALTY: June 1 Plan & Disclosure Statement Hearing Set SHOPS@BIRD & 89: Case Summary & Two Unsecured Creditors SMILE HOMECARE: Seeks to Extend Exclusivity Period to November 21 SOUND INPATIENT: $610M Bank Debt Trades at 24% Discount STEAK & STONE: Wins Cash Collateral Access Thru June 8 STRUCTURLAM MASS: May 1 Deadline Set for Panel Questionnaires SUREFUNDING LLC: Seeks to Extend Exclusivity Period to June 26 TALEN ENERGY: Announces Upsizing, Pricing of Sr. Notes Offering TKEES INC: Taps Fleit Gibbons Gutman Bongini as Special Counsel TOSCA SERVICES: $626.5M Bank Debt Trades at 27% Discount TOTAL SAFETY: Moody's Cuts Secured Term Loan Rating to Caa1 TURBO COMPONENTS: Case Summary & 20 Largest Unsecured Creditors UNITED FURNITURE: Properties to be Sold as Part of Bankruptcy UNITED PF: S&P Alters Outlook to Negative, Affirms 'CCC+' ICR VALLEY PROPERTY: Taps Golden Goodrich as Legal Counsel VESTA HOLDINGS: Court Confirms Chapter 11 Liquidation VESTA HOLDINGS: Joint Liquidating Plan Confirmed by Judge VYANT BIO: To Voluntarily Delist Shares From Nasdaq WEWORK INC: Two Proposals Passed at Special Meeting WHITTAKER CLARK: 4 Berkshire Entities Now in Chapter 11 WW INTERNATIONAL: $945M Bank Debt Trades at 31% Discount YOAKUM ISD: Fitch Affirms 'BB' LongTerm IDR, Outlook Negative [*] Richard Klein Joins Hilco's Special Situations Department [^] BOND PRICING: For the Week from April 24 to 28, 2023 ********* 280 AURARIA: Court OKs Interim Cash Collateral Access ----------------------------------------------------- The U.S. Bankruptcy Court for the District of Colorado authorized 5280 Auraria, LLC to use cash collateral on an interim basis in accordance with the revised April 2023 budget, with a 15% variance. The Debtor is directed to provide DB Auraria, LLC and Auraria Stub, LLC on or before the 10th day of the following month, an accounting for the prior month of all revenue, cash expenditures and collections, with a comparison to budget, in substantially the same form as that provided by the Receiver on September 6, 2022. To the extent the Court determines the Lender's collateral has diminished in value from the Petition Date, the Lender will receive the following means of adequate protection: a. A 11 U.S.C. Section 507(b) claim for the diminution in value of the Lender's collateral since the Petition Date; and b. A replacement lien, pari passu with the Lender's senior lien, on all assets of the Debtor. To the extent necessary under applicable law, the Lender and Auraria Stub LLC will be deemed to have requested an administrative expense claim in respect of adequate protection relief. The Debtor's right to use cash collateral will terminate upon the earliest of: a. April 30, 2023, provided that funds to be paid from an approved budget for a designated purpose may be expended for that purpose, within the limits of the budget and in the ordinary course of business, the following month. If this situation occurs, the Debtor shall specify information in the Monthly Operating Reports so the Lender and Auraria Stub LLC can track what is being done; b. The failure by the Debtor to deliver to DB Auraria, LLC and Auraria Stub, LLC, and to otherwise comply with, any of the reporting or other information required to be delivered pursuant to this Interim Order when due under the Order or any such documents or other information will contain a material misrepresentation; subject to a cure period of three business days after the Debtor receives written notice from DB Auraria, LLC or Auraria Stub, LLC of insufficient reporting; c. The closing date of any sale of substantially all of the Debtor's assets; d. The failure by the Debtor to observe or perform any of its obligations or the other terms or provisions contained therein, including the use of cash collateral in any manner not permitted by or otherwise inconsistent with the Budget (subject to any permitted variance) or agreed to by the Parties; e. The Court will have entered an order dismissing the Chapter 11 Case; f. The Court will have entered an order converting the Chapter 11 Case to a case under chapter 7 of the Bankruptcy Code; and g. The Court will have entered an order authorizing the appointment or election of a trustee or examiner with expanded powers or any other representative with expanded powers relating to the operation of the businesses in the Chapter 11 Case. DB Auraria, LLC or Auraria Stub, LLC, as the case may be, is required to provide three business days' written notice of an alleged Termination Event. The lender providing notice of a Termination Event may withdraw or extend the three business days' notice in its sole discretion, without the need for further notice or Court approval. A final hearing on the matter is set for May 17 at 10:30 a.m. A copy of the court's order and the Debtor's budget is available at https://bit.ly/3V7Nu2J from PacerMonitor.com. The Debtor projects $271,706 in total rent and $161,618 in total expenses for April 2023. About 5280 Auraria 5280 Auraria, LLC, owns Auraria Student Lofts, a high-rise building in downtown Denver aimed at providing housing for college students. 5280 Auraria's sole member and manager is Nelson Partners, LLC, a Utah limited liability company. The individual principal is Patrick Nelson. 5280 Auraria sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Colo. Case No. 22-12059) on June 9, 2022. In the petition filed by Patrick Nelson, as managing member, the Debtor listed between $50 million and $100 million in both assets and liabilities. Judge Kimberley H. Tyson oversees the case. Michael J. Pankow, Esq., at Brownstein Hyatt Farber Schreck, LLP is the Debtor's counsel. ADLER GROUP: S&P Upgrades ICR to 'CCC+', Outlook Negative --------------------------------------------------------- S&P Global Ratings raised its long-term issuer credit rating on Adler Group S.A (Adler) and its subsidiary Adler RE to 'CCC+' from 'SD'. At the same time, S&P assigned a 'B' issue rating (recovery rating of '1') to the new EUR937.5 million first-lien senior secured facility. S&P also raised its issue ratings on Adler's second-lien secured debt maturing 2025 (extended from 2024), and Adler RE's 2024 and 2026 bonds to 'CCC+' (recovery ratings of '3'). S&P also raised the rating on Adler's third-lien secured debt to 'CCC-' (recovery rating of '6') and affirmed the issue rating on Adler RE's unsecured 2023 bond at 'CCC-', which will be repaid at maturity on April 27, 2023. The negative outlook reflects the risk that Adler and Adler RE may not be able to sell assets as planned caused by the current market situation and tight liquidity headroom or any potential findings in the financial audited report, which S&P deems to be material to the company's overall creditworthiness, or materialized legal risk. The completed debt restructuring has improved Adler's immediate liquidity position. The transaction provides the company with additional liquidity of roughly EUR937.5 million. It borrowed this at 12.5% per year payment-in-kind (PIK) with maturity on June 30, 2025, under first-lien senior secured debt. The new money will be used mainly to repay two of Adler RE's outstanding 2023 and 2024 unsecured bonds. Also, as a result of the restructuring, the interest terms for all the outstanding unsecured non-convertible bonds at Adler Group S.A. changed to PIK from cash (backed by a coupon uplift of 2.75 percentage points per year) until July 31, 2025. S&P notes that Adler's liquidity needs are covered by slightly more than 1.0x in the next 12 months, mainly supported by cash and cash equivalent of about EUR599 million (including EUR213 million at Brack Capital Properties N.V. [BCP]) at the group level as of Dec. 31, 2022, and net new money received of about EUR880 million, which will well cover the maturities of about EUR1,322 million in the next 12 months (including EUR300 million of Adler RE's 2024 bonds). The debt restructuring gives the company about two years to dispose of assets so it can pay its debts at the maturities. The new money is raised through loan participation notes issued at Adler Finance PLC, an orphan special purpose vehicle, that is, in turn, providing loans to Adler Group and its subsidiaries. The loans are backed by loan participation notes, which are subscribed by external investors. In light of the first-lien collateral over the group's yielding properties, after the bank debt provided for the loans backing the notes, S&P sees the new money notes as ranking ahead of all of the group's other notes. Consequently, S&P rates the new notes two notches above the issuer credit rating. S&P said, "Despite improvements in its immediate liquidity position, we think Adler will remain dependent on disposing real estate assets to maintain sufficient liquidity headroom and sustain its new capital structure, and will remain exposed to litigation risk over the next 24 months. Adler's capital structure remains unsustainable because of its heavy debt load and substantial maturities arising in 2025, and its deleveraging fully depends on asset disposals. We think asset sales are challenging considering the uncertain economic environment and increasing interest rates. The economic volatility could lead to more time in selling the assets than initially planned and could increase the risk of liquidity stress in the next 18-24 months. We understand the company expects the bank debt to be refinanced before or at maturity. We also think that the group remains exposed to legal risk that could put pressure on its creditworthiness or liquidity if any material claims or legal fines materialize. In our view, the legal risks could stem from, for example, Adler's failure to timely file its audited accounts, or from legal actions taken by an investor at a German court, mainly challenging Adler substituting a U.K. company as an issuer of its outstanding senior non-convertible notes. "We assigned an issue rating to the new funding instrument and raised the ratings on Adler and Adler RE's senior secured bonds. We assigned a 'B' issue rating (recovery rating of '1') to the new first-lien senior secured facility of EUR937.5 million. We also raised the rating on Adler Group's second-lien secured debt, due 2025 (extended from 2024), and the rating on Adler RE's 2024 and 2026 bonds to 'CCC+' (recovery ratings of '3'), and raised the rating on Adler's remaining third-lien secured debt to 'CCC-' (recovery rating of '6'). We also affirmed the issue rating on Adler RE's 2023 bonds at 'CCC-', which will be repaid at maturity on April 27, 2023. We note the existing Adler RE, and Adler Group bonds will receive separate collateral packages relating to properties of the respective subgroups. We see Adler RE's collateralization as higher than Adler Group's and, therefore, foresee high recovery at Adler RE in a hypothetical default. We also believe that our recovery outcomes for the Adler RE bonds and the Adler 2025 bond will largely depend on which subgroup will sell real assets over the next two years. For instance, we could see lower recovery prospects for Adler RE if most asset sales happen there or a lower recovery of the Adler 2025 notes if most asset sales are conducted there. Although Adler RE amended its 2024 bond terms, we understand the company will repay this only when it is economical to do so. Until that point of time, the new instrument will be held in an escrow account and accessible only for the bonds' repayment. "The negative outlook reflects the risk that Adler group and Adler RE may not be able to sell assets as planned caused by the current market situation and tight liquidity headroom or any potential findings in the financial audited report, which we deem to be material to the company's overall creditworthiness, or materialized legal risk." S&P could lower our ratings on Adler Group and Adler RE if any default occurs in the next 12 months, including as a result of: -- The company not being able to sell sufficient real estate assets (yielding or development assets) in a timely manner ahead of 2025 maturities; -- There are potential material findings in the audited report, which could further harm its creditworthiness; or -- There is a substantial reported devaluation in the company's real estate portfolio such that its loan to value (LTV) ratio exceeds materially 85%. S&P said, "We could revise the outlook to stable if the company's liquidity improves, and we do not envisage a stress scenario in the near term. We would also expect Adler group to publish its audited financial report by September 2024, in line with the requirements for its new funding." ESG credit indicators: E-2, S-2, G-5 AEARO TECHNOLOGIES: Veterans Sue 3M to Stop Chapter 11 ------------------------------------------------------ Dietrich Knauth of Insurance Journal reports that U.S. veterans and members of the military on Wednesday urged a judge to dismiss 3M’s bid to use the bankruptcy of its subsidiary Aearo Technologies to shield itself from nearly 260,000 lawsuits over military-issue earplugs that former users allege were defective and damaged their hearing. 3M and Aearo say the earplug litigation has spiraled out of control. But attorney Adam Silverstein, who represents veterans suing 3M over hearing loss, said at a court hearing in Indianapolis that filing for bankruptcy, like “pulling a fire alarm,” should be reserved for urgent threats. Aearo was not in need of emergency rescue, because it had filed for bankruptcy solely as "a strategic alternative to managing 3M's litigation," Silverstein said. "If the firemen determine something is a false alarm, they don't wait around to see if a fire might start later or if there’s some other problem they can assist with," he said. "They leave." Aearo, which made the combat arms earplugs, filed for bankruptcy last July, with 3M pledging $1 billion to fund its liabilities stemming from the lawsuits that accuse both Aearo and 3M of misrepresenting the earplugs' effectiveness, leading to hearing damage. The plaintiffs have called that move a bid to escape the Florida federal court where the earplug lawsuits are consolidated in a so-called multidistrict litigation, following a series of unfavorable legal rulings and trial losses. On Tuesday, April 18, 2023, Aearo attorney Chad Husnick said U.S. law does not require the "house to be on fire" before a company files for bankruptcy. Aearo should be allowed to proactively resolve the growing problem of earplug lawsuits through a bankruptcy settlement, Husnick said. U.S. Bankruptcy Judge Jeffrey Graham will continue to hear evidence on Thursday before he makes a ruling on whether to dismiss the case. 3M’s bankruptcy strategy, along with a similar effort by Johnson & Johnson, has attracted both criticism and support, sparking a debate about whether bankruptcy is an appropriate solution for financially healthy companies facing significant litigation. The case against 3M and Aearo is the largest-ever multidistrict litigation in U.S. history, with nearly 330,000 cases filed and approximately 260,000 pending cases, according to court statistics from March 16. 3M has lost 10 of the 16 cases that have gone to trial so far, with about $265 million being awarded in total to 13 plaintiffs. About Aearo Technologies Aearo Technologies -- https://earglobal.com/en -- is a 3M company that designs, manufactures, and sells personal protection equipment. The Company offers prescription and non-prescription safety eye wear, face shields, hard hats, and respirators. Aearo serves customers worldwide. To address claims related to the Combat Arms Earplugs Version 2, Aearo Technologies LLC and its affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Ind. Lead Case No. 22-02890) on July 26, 2022. In the petition filed by John R. Castellano, as authorized signatory, Aearo Technologies estimated assets and liabilities between $1 billion and $10 billion each. 3M is not a debtor in the Chapter 11 cases. 3M has committed $1 billion to fund a trust allocated for Combat Arms claims. Kirkland & Ellis LLP is serving as legal counsel and AlixPartners LLP is serving as restructuring advisor to Aearo Technologies. Ice Miller LLP, is serving as bankruptcy co-counsel to the Debtors. Kroll is the claims agent. PJT Partners is serving as financial advisor and White & Case LLP is serving as legal counsel to 3M. AEREOS PORTUGUESES: S&P Affirms 'B+' ICR, Outlook Stable -------------------------------------------------------- S&P Global Ratings affirmed its long-term issuer credit and issue ratings on Transportes Aereos Portugueses S.A. (TAP) and its senior unsecured debt at 'B+'. S&P raised our recovery rating on the debt to '3' from '4'. S&P said, "The stable outlook reflects our expectation that the air traffic recovery will continue in 2023--assuming macroeconomic and/or geopolitical conditions do not deteriorate unexpectedly and sharply, and air passenger fares remain elevated above pre-pandemic levels--allowing TAP to sustain adjusted FFO to debt above 12% in 2023. The stable outlook also hinges on our assumption that the potential privatization won't change our assessment of the moderate likelihood of extraordinary financial support from the Portuguese state. "We now expect demand for TAP's flights to reach close to pre-pandemic levels in 2023 from 87% in 2022, based on revenue-passenger-kilometers (RPKs).In 2022, the recovery in demand for TAP's flights significantly outperformed our expectations as reflected in increased passenger numbers (81% of 2019 levels from just 34% in 2021), and underpinned by the introduction of new routes as part of the airline's network optimization strategy. In 2023, we expect this positive trend to continue, supported by resilient demand for leisure travel--so far largely inelastic to cost-of-living inflation and rising interest rates. According to the International Air Transport Association, in February 2023 total global air passenger traffic (measured in RPKs) reached 84.9% of February 2019 levels and rose 55.5% compared with February 2022. This furthers the strong start to the year, when RPKs stood at 84.2% of January 2019 levels, marking 67% year-on-year growth. Specifically, TAP benefits from its focus on long-haul destinations such as Brazil, North America, and Portuguese speaking Africa, with still unsaturated pent-up demand, as well as Portugal's position as a popular leisure travel destination. At the same time, we understand that TAP's downsized fleet and its highly congested major hub in Lisbon limit material upside potential in air traffic volumes beyond our 2023 base-case projection in 2024. "We expect the additional revenue gains in 2023 to be largely absorbed by a higher fuel bill and nonfuel cost inflation.In 2023, we forecast revenue growth will continue, albeit at a slower pace than in 2022. Last year, TAP's revenue increased to EUR3.5 billion from just EUR1.4 billion in 2021. This was above pre-pandemic levels, with the gap in demand and reduced capacity offset by strong air passenger yields that exceeded pre-pandemic levels by about 21% (up 17% year on year). As a result, 2022 EBITDA skyrocketed to EUR778 million from a negative value in 2021, significantly above pre-pandemic levels and our previous forecast. We think that yields will remain elevated in 2023. Our forecast hinges on a steady air travel recovery and rational capacity deployment, underpinning the ability and willingness of the sector to pass cost inflation to passengers through higher air fares, which are consistently above pre-pandemic levels. At the same time, we think a higher fuel bill--also considering the increasing costs to compensate for carbon dioxide (CO2) emissions--and inflationary pressure on other costs will cap EBITDA at 2022 levels or slightly below in 2023. "The expanded earnings base translates into stronger credit metrics that are now commensurate with an aggressive financial risk profile (compared with highly leveraged previously) and supports the SACP revision to 'b' from 'b-'.Strong operating performance helped to offset elevated adjusted debt, which we estimate at EUR3.7 billion at year-end 2022, since TAP is renewing its fleet. As a result, TAP's adjusted FFO to debt improved to 16%-17% in 2022 from a negative value in 2021, and above 2019 levels. We do not deduct cash for our adjusted debt calculation. In 2023, we expect the metric to be sustained above 12%, not least supported by the company's intention to deleverage. We understand that the EUR200 million senior unsecured notes due in June this year will be redeemed at maturity. "We expect free operating cash flow (FOCF) after leases to remain negative in 2023, which currently caps SACP uplift to one notch.Despite record-high EBITDA in 2022, FOCF after leases was negative, albeit significantly less so than in 2021. We expect continuous high lease payments and renewal capex in 2023 to further constrain FOCF in negative territory. Therefore, we apply a negative comparable rating analysis modifier, which limits our upward SACP revision to one notch instead of the two implied by the anchor, derived from a combination of the aggressive financial risk profile and weak business risk profile. "TAP's solid liquidity profile following the drawing under the last tranche of state aid supports our higher SACP assessment. The company's cash position improved to EUR916.1 million at year-end 2022 from EUR812.6 million at year-end 2021. Negative (albeit significantly improved) FOCF after leases was more than offset by the EUR294 million cash increase from a partial release of the EUR980 million new capital fully subscribed by the Portuguese government at year-end 2022. This capital increase was the last tranche of the state aid provided to TAP under EU guidelines on rescue and restructuring aid, which was approved by the European Commission. The remaining cash injections from the newly subscribed capital will be implemented in equal amounts of EUR343 million each in 2023 and 2024. Since we expect operating cash flow to remain close to the strong levels in 2022, this should comfortably cover the upcoming near-term maturities in 2023. "We see a near-term risk that the potential privatization weakens the Portuguese government's link with TAP. Currently the Portuguese government, via the Directorate General of Treasury and Finance (DGTF), is the sole shareholder of TAP. However, we understand that there are near-term plans for privatization and are alert to a potential risk that this may lead to a significant reduction in state ownership, relinquishment of control, and weakening of the link with TAP. Therefore, we now view a moderate (previously moderately high) likelihood that the Portuguese government would provide extraordinary support to TAP, if under stress, in a credit-supportive and timely manner. As a result, we apply one notch (previously two notches) of uplift to the rating from the SACP. Our view is underpinned by the track record of state aid to date, and the airline's importance to the government. We understand that the government views the airline as a strategic asset that is important to economic development and tourism. TAP is one of the largest employers in the country and the largest exporter of domestic services. Furthermore, the airline provides reasonable air connectivity to major trade partners' cities (apart from Spain) and supports its important tourism industry given the peripheral location of Portugal in Europe, which would otherwise be less efficiently accessible by alternative modes of transport. "The stable outlook reflects our expectation that the recovery in air traffic will continue in 2023--assuming macroeconomic and/or geopolitical conditions do not deteriorate unexpectedly and sharply and air passenger fares remain elevated above pre-pandemic levels--which should allow TAP to sustain adjusted FFO to debt above 12% in 2023. The stable outlook also hinges on our assumption that the potential privatization won't change our assessment of the moderate likelihood of extraordinary government support, currently translating in one notch of uplift from the SACP. "We could lower the rating if TAP's adjusted FFO to debt falls below 12% and remains at this level for a prolonged period without prospects of recovery. This may happen if demand for its flights unexpectedly weakens and drags on its strong yields." A negative rating action may also follow if TAP's liquidity deteriorates materially, with sources to uses falling below 1.2x over the next 12 months, and this is not offset by timely and sufficient financial support from the Portuguese government. S&P said, "Furthermore, we could lower the rating if we believe that the likelihood of government support has weakened or if we lower our unsolicited sovereign rating on Portugal below 'BB+'. "We could upgrade TAP if its FOCF after leases improves close to break-even, while adjusted FFO to debt remains consistently above 12%. This may happen if TAP's EBITDA significantly outperforms our base case, for example on account of stronger yields. "If we raise our unsolicited sovereign rating on Portugal, it would not automatically lead to an upgrade of TAP." ESG credit indicators: To E-3, S-4, G-2; From E-3, S-5, G-2 S&P said, "Social factors are now a negative consideration in our credit rating analysis compared to very negative previously. This reflects the ongoing recovery in air passenger traffic following the lifting of pandemic-related travel restrictions (reduced health and safety risk) and associated positive effects on TAP's operating performance. The pandemic led to a severe drop in air traffic and forced TAP to resort to financial support from its shareholder, the Portuguese government, to prevent a liquidity shortfall. In 2022, demand (measured by number of passengers) improved to about 81% of pre-pandemic levels from just 34% in 2021. In 2023, we expect the recovery to continue, but only reach 2019 levels in 2024. "Environmental factors are a moderately negative consideration, reflecting pressures to reduce greenhouse gas emissions. As of 2022, 66% of TAP's mid- and long-haul operational fleet consisted of Airbus neo aircraft, with the rest requiring renewal in the next few years, which will weigh on further deleveraging." AEROCARE MEDICAL: Hires Cross Law Firm P.L.C. as Counsel -------------------------------------------------------- Aerocare Medical Transport System, Inc. seeks approval from the U.S. Bankruptcy Court for the District of Arizona to employ The Cross Law Firm, P.L.C. as counsel. The firm's services include: (a) advising and assisting the Debtor with respect to the obligations and limitations imposed upon it as a debtor in bankruptcy; (b) advising the Debtor with respect to the continued operation of its business while in bankruptcy; (c) advising the Debtor with respect to the treatment of claims against its bankruptcy estate and the assumption or rejection of executory contracts; (d) preparing pleadings and applications and attending all hearings and examinations necessary to the proper administration of the Debtor's bankruptcy case and any related proceedings; (e) advising and assisting the Debtor in the formulation and presentation of a plan of reorganization; and (f) any other necessary action concerning any of the above-mentioned matters. The firm will be paid at the rates of $350 to $595 per hour. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. James E. Cross, Esq., a partner at The Cross Law Firm, P.L.C., disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: James E. Cross, Esq. The Cross Law Firm, P.L.C. 7301 N. 16th Street, Suite 102 Phoenix, AZ 85020 PO Box 45469 Phoenix, AZ 85064 Tel: (602) 412-4422 Email: jcross@crosslawaz.com About Aerocare Medical Transport System AeroCare is a nationally recognized and accredited provider of worldwide air ambulance and medevac services. Aerocare Medical Transport System, Inc. in Phoenix, AZ, filed its voluntary petition for Chapter 11 protection (Bankr. D. Ariz. Case No. 23-02376) on April 13, 2023, listing $1,485,981 in assets and $3,108,797 in liabilities. Joseph Cece as president, signed the petition. CROSS LAW FIRM, P.L.C. serve as the Debtor's legal counsel. AIR CANADA: S&P Alters Outlook to Positive, Affirms 'BB-' ICR ------------------------------------------------------------- S&P Global Ratings revised the outlook on Air Canada to positive from stable and affirmed its 'B+' issuer credit rating on the company. S&P also affirmed its 'BB-' issue-level rating, with a '2' recovery rating, on the company's secured debt. S&P said, "At the same time, we raised our issue-level rating by one notch to 'BBB+' from 'BBB' on Air Canada's 2020-2 Class B enhanced equipment trust certificates (EETCs) reflecting reduced loan-to-value ratios. We also affirmed the ratings on all other Air Canada EETCs. "The positive outlook reflects the potential for an upgrade later this year, as we estimate Air Canada will generate adjusted FFO to debt in the mid-teen percentage area in 2023 with further improvement expected in 2024. "We expect traffic at Air Canada will continue to recover resulting in stronger credit metrics. Air travel demand has been strong of late, which we believe will contribute to further growth in revenue passenger miles (RPM) (traffic) over the next couple of years. In Air Canada's case, we estimate RPMs (as a percentage of 2019 levels) will increase from about 70% in 2022 to 85%-90% in 2023, 95%-100% in 2024, and exceed 2019 levels in 2025. Although we believe this trend should generally hold over the next few quarters, we recognize that the pace of capacity and traffic growth prove to be uneven. This reflects potential for operating disruptions, particularly in the near term, associated with competition on certain continental north American routes and the challenges Air Canada and its transport partners could face as capacity and traffic ramp up. In our view, Air Canada's transborder and Atlantic routes, which made up close to half of the company's revenue before the COVID-19 pandemic, are performing well. Traffic on these routes was slow to recover in the first half of 2022 due to the Omicron variant and federal travel restrictions that were in place until April 2022. With those impediments mostly behind Air Canada, we see stronger prospects for growth in traffic and revenue on these routes in 2023. Regarding Air Canada's Pacific routes (particularly to and from China), we anticipate a relatively slower recovery. Despite China's re-opening, overflight restrictions from the ongoing conflict in Ukraine put Air Canada at a competitive disadvantage on such routes. "The strong demand we anticipate in Air Canada's key markets bodes well for traffic and should limit downside in yields through the important summer months. As a result, we expect significant revenue growth that will outpace cost inflation, contributing to adjusted EBITDA increasing to about C$2.5 billion in 2023 (from about C$1.5 billion in 2022) with further growth thereafter. Under these assumptions, we expect core credit ratios for Air Canada to improve meaningfully, including an adjusted FFO-to-debt ratio above our 12% upgrade trigger and adjusted debt-to-EBITDA ratio below 4x. Furthermore, we believe Air Canada's financial policies support deleveraging, with a public target of approaching net leverage of 1.5x in 2024 from 5.1x at year-end 2022. Based on our estimates, which are more conservative than the company's guidance, we see net leverage (as per Air Canada's calculation) ending 2024 at just above 2x. We assume most of the operating cash flow Air Canada generates in the next couple of years will be used to fund capital expenditures (capex) of about C$2 billion per year, including investments in aircraft freighters. While we expect these investments to somewhat constrain free operating cash flow (FOCF) generation to less 10% of adjusted debt through 2024, we also recognize that Air Canada began 2023 from a strong liquidity position with close to C$10 billion of liquidity. "Domestic competition is heating up and could weigh on longer-term profitability. Competition in the Canadian market is intensifying with the expansion of Porter Airlines and ultra-low-cost carriers that include Flair Airlines, Lynx Air (formerly Enerjet), and Canada Jetlines. We believe these airlines will focus on routes targeting continental North America, including flying from airports that are competitive with Air Canada. Of these airlines, we think Porter poses the largest challenge to Air Canada. The airline has plans to significantly expand, with firm orders for 50 Embraer E195-E2s placed last year, of which 25 are expected to be delivered this year. Porter also began flying out of Toronto's Pearson International Airport in February 2023, one of Air Canada's key hubs. Assuming these initiatives materialize, we estimate there could be as much as a 20% increase in North America (including sun destinations) aggregate capacity by the end of 2023 compared with 2019 (likely higher on specific routes) and even more by 2025. In our view, Air Canada is less exposed than its main domestic rival (WestJet Airlines Ltd.) to competition from ultra-low-cost carriers given its premium service focus, international traffic diversity, and varied/differentiated services. In addition, we feel that much of the capacity increase would likely be absorbed by higher air travel penetration, recapture of traffic from border U.S. cities, and from organic growth. Although we can't ignore the prospect of some price risk on specific routes (at least in the short term) and growth on the affected routes, we believe the company can manage this risk using its low-cost Air Canada Rouge platform. Arguably, in our opinion, there is significant uncertainty about the financial success of all the new entrants given weak precedence of new airline successes in Canada, particularly in the current environment of high fuel prices, interest rates, and inflation. "Various risks and uncertainties that have historically characterized the airline industry limit rating upside for now. We are taking a patient approach to rating upside for Air Canada for now, mainly due to the risks and uncertainties associated with a weaker North American economy this year and still fragile air transport infrastructure. The airline industry has been highly cyclical historically and sensitive to changing economic conditions. We also expect Air Canada will face sustainably higher labor costs and general inflationary pressure. Slower-than-expected demand, particularly if jet fuel prices remain elevated, could have a material effect its earnings. "Our energy team assumes a full-year average price of US$85 per barrel for West Texas Intermediate (WTI) and US$80 per barrel thereafter. However, we view these prices as higher than normal in a recession, reflecting disruptions caused by the Russia-Ukraine conflict and capacity constraints by OPEC and other major producers. In addition, we believe the increase in the spread between refined jet fuel and oil prices was unprecedented last year and remains elevated. If lower fares arise from softer demand or increased competition, it could limit Air Canada's ability to cover high jet fuel costs, and result in credit measures that are materially weaker than we expect. "The positive outlook reflects our view that Air Canada will generate credit measures that we view as strong for our issuer credit rating, including adjusted FFO to debt in the mid-teen percentage area in 2023 and higher in 2024. We believe the company will meaningfully increase its capacity this year amid continuing strong demand for passenger travel, with margin expansion that leads to higher earnings and cash flow generation. "We could revise the outlook to stable if, over the next 12 months, we expect Air Canada will generate FFO to debt below 12% in 2023 and 2024. This might occur from higher-than-expected costs and the effects of a weaker North American economy or competitive pressures that limit growth in its traffic, revenues, and margins. "We could raise our rating within the next 12 months if we see sustained improvement in traffic and expect Air Canada will generate and maintain FFO to debt well above 12% in 2023 and 2024. In this scenario, we would expect the company to meet our current estimates for EBITDA and FOCF generation and modest debt reduction. Greater visibility regarding the potential impact of increased domestic competition, cost inflation, and weaker macroeconomic conditions on Air Canada's passenger traffic and margins is likely required for us to better assess the sustainability of stronger credit measures." ESG credit indicators: E-3, S-4, G-2 S&P said, "Social factors are a negative consideration in our credit rating analysis. Air Canada's comparatively greater exposure to international routes severely affected the company's earnings and cash flow through the pandemic, leading to a three-notch downgrade in 2020. Although we expect loosening of travel restrictions to spur significant improvement in earnings and credit measures over the next couple of years, we continue to acknowledge that the pandemic highlighted the sensitivity of air traffic to health and safety risk.” Environmental factors are a moderately negative consideration in S&P's credit rating analysis of Air Canada. Similar to other airlines, the company faces long-term risk from tighter greenhouse gas emissions regulation. The company is mitigating this risk by retiring older aircraft and investing in more efficient new aircraft. Its average fleet age is about 12 years. AMERICAN HVAC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: American HVAC & Plumbing, Inc. 152 Kennedy Ave Campbell, CA 95008-4115 Business Description: The Debtor is an HVAC contractor in Campbell, California. Chapter 11 Petition Date: April 28, 2023 Court: United States Bankruptcy Court Northern District of California Case No.: 23-50461 Judge: Hon. Stephen L. Johnson Debtor's Counsel: Lars Fuller, Esq. THE FULLER LAW FIRM, PC 60 N Keeble Ave San Jose, CA 95126-2723 Tel: (408) 295-5595 Email: admin@fullerlawfirm.net Total Assets: $115,224 Total Liabilities: $2,221,984 The petition was signed by Cuinn F. Hamm as president. A full-text copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/QHE7VRQ/American_HVAC__Plumbing_Inc__canbke-23-50461__0001.0.pdf?mcid=tGE4TAMA AMSTERDAM HOUSE: Wins Interim Cash Collateral Access ---------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of New York authorized Amsterdam House Continuing Care Retirement Community, Inc. to use cash collateral on an interim basis. The Debtor is obligated to UMB Bank, N.A. for the benefit of the beneficial holders of the Bonds, authorized and issued by Nassau County Industrial Development Agency. The Issuer issued (1) $40.710 million Continuing Care Retirement Community Taxable Revenue Bonds (Amsterdam at Harborside Project), Series 2021A, and (2) $127.327 million Continuing Care Retirement Community Tax Exempt Refunding Revenue Bonds, Series 2021B pursuant to the Indenture of Trust dated September 1, 2021. As of the Petition Date, the amounts due and owing by the Debtor with respect to the Bonds and the obligations under the Bond Documents are: (i) unpaid principal on the Bonds in the amount of $168.037 million; (ii) accrued but unpaid interest on the Bonds in the amount of $2.3 million as of the Petition Date; and (iii) unliquidated, accrued and unpaid fees and expenses of the Bond Trustee and its professionals incurred through the Petition Date. The amounts, when liquidated, will be added to the aggregate amount of the Bond Claim. As adequate protection for any diminution in the value of cash collateral resulting from the Debtor's use thereof after the Petition Date, and solely to the extent of any Diminution, the Bond Trustee will have a valid, perfected, and enforceable replacement lien and security interest in (i) all assets of the Debtor existing on or after the Petition Date of the same type as the Bond Collateral, together with the proceeds, rents, products, and profits thereof and (ii) all other assets of the Debtor. As additional adequate protection for any Diminution, the Bond Trustee will have a superpriority administrative expense claim pursuant to 11 U.S.C. section 507(b) with recourse to and payable from any and all assets of the Debtor's estate other than the Debtor's rights under the LSA. The Secured Party Superpriority Claim will have priority, pursuant to section 507(b), over any and all administrative expenses, diminution claims, and all other claims against the Debtor. The Debtor's authority to use cash collateral will terminate without any further action by the Court, and a Termination Event will occur without prior notice, upon the occurrence of any of the following: (i) The Chapter 11 Case is dismissed or converted to a case under Chapter 7 of the Bankruptcy Code; (ii) The Interim Order becomes stayed, reversed, vacated, amended, or otherwise modified in any respect without the prior written consent of the Bond Trustee; (iii) The Debtor violates any term or condition of the Interim Order; (iv) The Debtor pays any line-item expenses in a manner, time or amount that is inconsistent with the Cash Collateral Budget; (v) The Debtor fails to file a bidding procedures motion and supplemental DIP Financing documents (including terms of the proposed DIP Financing to be presented to the Court for approval at the Final Hearing) with the Bankruptcy Court by April 19, 2023; (vi) The Debtor fails to provide to the Bond Trustee by April 21, 2023, the following documents: (a) a copy of the draft asset purchase agreement to be posted in the data room with respect to the Facility; (b) copies of any solicitation materials prepared by the Debtor or its professionals with respect to the sale of the Facility pursuant to the proposed bid procedures; and (c) a list of all potential purchasers of the Facility contacted or to be contacted by the Debtor or its professionals in connection with the solicitation of offers relating to the Facility; (vii) The Debtor fails to provide copies of any documents received from potential purchasers of the Facility to the Bond Trustee within one calendar day of receipt; or (viii) The Debtor fails to permit the Bond Trustee and/or its professionals access to the Facility upon two business days' prior written notice. The Bond Trustee consents to certain expenses incurred during the Interim Period that will be superior in all instances to the liens and claims of the Bond Trustee and all other parties. The Carve Out means the statutory fees of the U.S. Trustee pursuant to 11 U.S.C. section 1930 and the fees of the Clerk of the Court plus any interest at the statutory rate. A final hearing on the matter is set for May 2, 2023 at 11 a.m. A copy of the order is available at https://bit.ly/3NhGFK4 from PacerMonitor.com. About Amsterdam House Continuing Care Amsterdam House Continuing Care Retirement Community, Inc., doing business as The Amsterdam at Harborside, operates Nassau County's first and only continuing care retirement community licensed under Article 46 of the New York Public Health Law, which provides residents with independent living units, enriched housing and memory support services, comprehensive licensed skilled nursing care, and related health, social, and quality of life programs and services. Amsterdam House Continuing Care Retirement Community filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 23-70989) on March 22, 2023. In the petition signed by Brooke Navarre, president and chief executive, officer, the Debtor disclosed up to $500 million in both assets and liabilities. Judge Alan S. Trust oversees the case. Gregory M. Juell, Esq., at DLA Piper LLP (US), represents the Debtor as legal counsel. ANTERO RESOURCES: S&P Alters Outlook to Pos., Affirms 'BB+' ICR --------------------------------------------------------------- S&P Global Ratings revised its rating outlook on Antero Resources Corp. to positive from stable and affirmed its 'BB+' issuer credit rating on the company and its 'BB+' issue-level rating on its unsecured debt. The positive outlook reflects the potential to raise ratings over the next 12 months based on the company's stronger business risk profile combined with S&P's expectation of continued solid operational execution as well as lower debt levels. The rating on Antero is supported by its position as one of the largest natural gas and NGL producers in the U.S. S&P Global Ratings expects Antero's production to be about 3.2 billion cubic feet equivalent per day (Bcfe/d)-3.3 Bcfe/d in 2023, remaining relatively flat in 2024. In addition, the company has increased its reserves to 17.8 trillion cfe at year-end 2022 from 17.4 Tcfe at year-end 2021, with approximately 75% of reserves classified as proved developed. Antero was able to increase its reserves organically while not increasing debt levels. Antero estimates it has more than 1,500 premium core undeveloped locations and more than 20 years of premium core drilling inventory with approximately 75 wells drilled per year. The company's wells continue to outperform expectations, providing for increased cash flow. Antero sells 100% of its natural gas out of basin and 75% of its production is transported to the LNG corridor, which provides for premium pricing. The company has a good commodity mix, with approximately 45% of revenue coming from liquids, which provides for higher prices and cash flow compared with gassier peers. S&P continues to expect NGL prices to remain elevated, supporting Antero's cash flow and credit measures. Operationally, Antero's wells continue to outperform expectations, and we forecast Antero to increase its liquids production while gas production decreases in the low-single-digit percent area. Financial measures have improved due to debt reduction and S&P's expectation for continued lower debt levels. Since year-end 2019, Antero has reduced absolute debt levels by approximately $2.6 billion, including over $900 million of debt since February 2022. S&Psaid, "We expect adjusted debt levels to continue to decline as the company balances its free cash flow for shareholder returns and debt reduction. Antero generated over $2 billion of free cash flow in 2022 and over $2.5 billion over the past two years. While the company is unhedged going forward and susceptible to volatile commodity prices, the previous debt reduction, available liquidity, and balance sheet strength support the rating. In addition, on an adjusted basis, S&P Global Ratings has revised its calculation of consolidated debt metrics with Antero Midstream Partners L.P. and has reduced approximately $1.4 billion of adjusted debt related to Antero Resources and Antero Midstream inter-company leases. We now forecast funds from operations (FFO) to debt above 60% in 2023, increasing in 2024 due to strong commodity prices and reduced debt levels. We do not expect Antero's financial policies to add debt to support shareholder returns." The positive outlook reflects the potential to raise ratings over the next 12 months based on Antero's ability to reduce its total debt and its improving free cash flow and cost structure. S&P said, "We expect the company's FFO to debt to average comfortably above 60% over the next 12 months, which is a level we consider appropriate for the current rating. However, the company has significant exposure to liquids pricing, transports all production out of basin, and has a strong commodity mix of liquids and gas. We note that the company has no hedges in place for 2023 and beyond, which we view as a credit negative given current volatility in the market, particularly natural gas." S&P said, "We could revise the outlook to stable if Antero's credit measures weakened such that its FFO to debt approached 45% with no clear path toward improvement at our mid-cycle price assumptions. This would most likely occur if the company increased shareholder returns above free cash flows or natural gas and NGL prices were weaker than our expectations. "We could raise our rating on Antero if it continued to improve its credit measures, including FFO to debt well above 60% at our mid-cycle pricing assumptions, combined with expectations of sustained free cash flow. In addition, we would want to see cash costs reduced closer to peers to support cash flows under weaker price environments. This could occur if the company continued to reduce its overall debt levels using its expected free cash flow." ESG credit indicators: E-4, S-2, G-2 S&P said, "Environmental factors are a negative consideration on our credit rating analysis on Antero Resources Corp. because the E&P industry contends with the accelerating energy transition and adoption of renewable energy sources. We believe falling demand for fossil fuels will lead to declining profitability and returns for the industry as it fights to retain and regain investors that seek higher returns. To help address these concerns, Antero has lowered its methane leak loss rate (0.046%), reused/recycled 83% of its produced water generated in 2020, partnered with Project Canary for a responsibly sourced gas certificate, and set a goal to reach net zero carbon emissions by 2025." ARCHDIOCESE OF NEW ORLEANS: Judge Guidry Won't Recuse From Case --------------------------------------------------------------- Jim Mustian of the Associated Press reports that a federal judge refused Friday, April 21, 2023, to recuse himself from the New Orleans Roman Catholic bankruptcy after an Associated Press report that he donated tens of thousands of dollars to archdiocese charities and consistently ruled in favor of the church in the contentious case involving nearly 500 clergy sex abuse victims. U.S. District Judge Greg Guidry told attorneys in the high-profile case that a panel of federal judges he asked to review the possible conflict determined no "reasonable person" would question his impartiality despite his contributions and longstanding ties to the archdiocese. Guidry read from the opinion of the Washington-based Committee on Codes of Conduct, which noted that none of the charities he donated to "has been or is an actual party" in the bankruptcy and that Guidry's eight years on the board of the archdiocese's charitable arm ended more than a decade before the bankruptcy. "Based upon that advice and based upon my certainty that I can be fair and impartial, I have decided not to recuse myself," said Guidry, who oversees the bankruptcy in an appellate role. Guidry's announcement came hours after AP published its report and more than a week after it confronted him with its findings. Several ethics experts told AP the 62-year-old jurist should step aside from the case to avoid the appearance of conflict, even if it threatened to send the complex, three-year bankruptcy into disarray with a slew of new hearings and appeals of his decisions. "It would create a mess and a cloud of suspicion over every ruling he's made," said Keith Swisher, a professor of legal ethics at the University of Arizona, describing the judge's donations as "more like fire than smoke." AP's reporting on Guidry and other judges in the New Orleans bankruptcy underscores how tightly woven the church is in the city's power structure, a coziness perhaps best exemplified when executives of the NFL's New Orleans Saints secretly advised the archdiocese on public relations messaging at the height of its clergy abuse crisis. It also comes at a fraught moment when attorneys in the bankruptcy are seeking to unseal a trove of thousands of secret church documents produced by lawsuits and an ongoing FBI investigation of clergy abuse in New Orleans going back decades. Guidry had rebuffed at least one such request to unseal some of the documents. AP's review of campaign-finance records found that Guidry, since being nominated to the federal bench in 2019 by then-President Donald Trump, has given nearly $50,000 to local Catholic charities from leftover contributions he received after serving 10 years as a Louisiana Supreme Court justice. Most of that giving, $36,000 of it, came in the months after the archdiocese sought Chapter 11 bankruptcy protection in May 2020 amid a crush of sexual abuse lawsuits. That included a $12,000 donation to the archdiocese's Catholic Community Foundation in September 2020 on the same day of a series of filings in the bankruptcy, and a $14,000 donation to the same charity in July of the following year. But the advisory opinion Guidry cited Friday noted that his contributions to the Catholic charities amounted to less than 25 percent of the campaign funds he had available to donate. It also said "simply participating as a faithful participant in the life of your parish and the archdiocese of which it is a part cannot amount to a reasonable basis for questioning impartiality in litigation involving the church." Guidry's philanthropy over the years also appears to include private donations. Newsletters issued by Catholic Charities of New Orleans, the charitable arm of the archdiocese, recognized Guidry and his wife among its donors for unspecified contributions, in 2017 listing both the judge and his campaign. The judge previously provided pro bono services and served as a board member for Catholic Charities between 2000 and 2008, a time when the archdiocese was navigating an earlier wave of sex abuse lawsuits. Catholic Charities was involved in at least one multimillion-dollar settlement to victims beaten and sexually abused at two local orphanages. Within a year of his most recent contributions, Guidry began issuing rulings that altered the momentum of the bankruptcy and benefited the archdiocese. Guidry upheld the removal of several members from a committee of victims seeking compensation from the church. Those plaintiffs repeatedly complained about a lack of transparency in the case and argued that the archdiocese's primary reason for seeking the legal protection was to minimize payouts. The Moody's rating agency found that the archdiocese sought bankruptcy despite having “significant financial reserves, with spendable cash and investments of over $160 million. And just last month, Guidry affirmed a $400,000 sanction against Richard Trahant, a veteran attorney for clergy abuse victims who was accused of violating a sweeping confidentiality order when he warned a local principal that his school had hired a priest who admitted to sex abuse. Trahant, who declined to comment, has become a prominent adversary of the archdiocese, drawing attention to what he calls a conspiracy by top church officials in New Orleans to cover up clergy abuse. Charles Geyh, a professor at Indiana University who studies judicial ethics, said Guidry’s generous donations and close ties to the church are clearly reasons to question his ability to be a fair referee. "Not only has the judge made significant financial contributions to a church whose archdiocese is a party in litigation before him, but those contributions are inextricably linked to his status as a judge," Geyh said. "The judge chose to donate the overflow of campaign funds generated to further his professional life as a judge to further his religious life in the church, which implies a connection in the judge's mind between his religious and professional identities." In heavily Catholic New Orleans, Guidry is far from the only federal judge with longstanding ties to the archdiocese. Several of Guidry’s colleagues have recused themselves from the bankruptcy or related litigation. They include U.S. District Judge Wendy Vitter, who for years worked as general counsel for the archdiocese, defending the church against a cascade of sex abuse claims before Trump nominated her to the federal bench in 2018. Another federal judge, Ivan Lemelle, serves on the board of the Catholic Community Foundation. Yet another, U.S. District Judge Jay Zainey recused himself from cases related to the bankruptcy after publicly acknowledging the role he played in the behind-the-scenes media relations campaign that executives of the New Orleans Saints did for the archdiocese in 2018 and 2019. At the time, Zainey told The Times-Picayune he would recuse himself from future church-related cases. But less than a year ago, Zainey quietly struck down a Louisiana law, vigorously opposed by the archdiocese, that created a so called look-back window allowing victims of sexual abuse to sue the church and other institutions no matter how long ago the alleged abuse took place. Zainey didn't respond to a request for comment. "These are federal judges who are incredibly active in different ministries throughout the archdiocese," said James Adams, a past president of the Catholic Community Foundation who was abused by a priest as a fifth-grader in 1980. "I'm not saying they don't do good works, but it certainly raises an eyebrow when they then have cases involving the Archdiocese of New Orleans." Jason Berry, an author who has written several books on clergy abuse and most recently a history of New Orleans, said the influence of the church on the court system in the city "stinks to high heaven." "The larger question here is whether justice has been compromised," he said. "You're talking about 500 people whose lives have been plundered, and that's one thing many people don't have a grasp of." About The Roman Catholic Church of the Archdiocese of New Orleans The Roman Catholic Church of the Archdiocese of New Orleans -- https://www.nolacatholic.org/ -- is a non-profit religious corporation incorporated under the laws of the State of Louisiana. Created as a diocese in 1793, and established as an archdiocese in 1850, the Archdiocese of New Orleans has educated hundreds of thousands in its schools, provided religious services to its churches and provided charitable assistance to individuals in need, including those affected by hurricanes, floods, natural disasters, war, civil unrest, plagues, epidemics, and illness. Currently, the archdiocese's geographic footprint occupies over 4,200 square miles in southeast Louisiana and includes eight civil parishes: Jefferson, Orleans, Plaquemines, St. Bernard, St. Charles, St. John the Baptist, St. Tammany, and Washington. The Roman Catholic Church for the Archdiocese of New Orleans sought Chapter 11 protection (Bankr. E.D. La. Case No. 20-10846) on May 1, 2020. The archdiocese was estimated to have $100 million to $500 million in assets and liabilities as of the bankruptcy filing. Judge Meredith S. Grabill oversees the case. Jones Walker, LLP and Blank Rome, LLP, serve as the archdiocese's bankruptcy counsel and special counsel, respectively. Donlin, Recano & Company, Inc., is the claims agent. The U.S. Trustee for Region 5 appointed an official committee of unsecured creditors on May 20, 2020. The committee is represented by the law firms of Pachulski Stang Ziehl & Jones, LLP and Locke Lord, LLP. Berkeley Research Group, LLC is the committee's financial advisor. BADGER FINANCE: $268.7M Bank Debt Trades at 17% Discount -------------------------------------------------------- Participations in a syndicated loan under which Badger Finance LLC is a borrower were trading in the secondary market around 83.1 cents-on-the-dollar during the week ended Friday, April 28, 2023, according to Bloomberg's Evaluated Pricing service data. The $268.7 million facility is a Term loan that is scheduled to mature on September 28, 2024. About $255.9 million of the loan is withdrawn and outstanding. Based in Little Chute, Wisconsin, Badger Finance, LLC is an intermediate holding company of Trilliant Food and Nutrition, LLC., Horseshoe Beverage Company, LLC, and affiliated companies. The company is a U.S. manufacturer of private label and value branded beverage products, mainly single serve coffee pods. The company's branded coffee products are primarily sold under its Victor Allen brand. Badger also recently expanded into ready-to-drink (RTD) coffee beverages through its Horseshoe Beverages subsidiary. Badger is sponsored by private equity firm Blackstone Group, which acquired the company in 2017 and holds a majority equity interest in the company. BED BATH: Store Closing Sales Begin Across Stores Nationwide ------------------------------------------------------------ Store closing sales have commenced across all 360 Bed Bath & Beyond and 120 buybuy BABY store locations nationwide. The liquidation event is being managed by Hilco Merchant Resources, Gordon Brothers, Tiger Capital Group, and B. Riley Retail Solutions in connection with the commencement of Chapter 11 bankruptcy petitions and orderly wind down of Bed Bath & Beyond, Inc. Shoppers can take advantage of discounts ranging from 10 to 30 percent off the lowest ticketed prices on a wide variety of home, baby, beauty, and wellness products at both banners. The Bed Bath & Beyond sales event offers a vast selection of home goods with discounts across all household items, including bedding, bath, décor, window curtains, furniture, kitchenware, cookware, small appliances, cleaning tools, storage and organization solutions in addition to personal care items, luggage, and more. The buybuy BABY sale provides a one-stop-shop for infant and toddler essentials from leading brands, including nursery furniture, cribs, bassinets, play yards, activity sets, strollers, car seats, travel gear, bouncers, swings, nursing and feeding supplies, clothing and accessories, bath products, diaper solutions, health and safety products, toys, and more. "This is an opportunity to save on household items or stock up on baby essentials at discounted prices. New merchandise is arriving in stores. Top-selling items from the most sought-after brands will be discounted and will sell out very quickly," stated a spokesperson for liquidation event, "We encourage shoppers to take advantage of these new price reductions before it's too late. Whether celebrating the birth of a baby or a new graduate, or for someone who enjoys cooking, gardening, or decorating, this unique sales event offers something for everyone." Select fixtures, furnishings and equipment will also be available for sale in closing locations. Gift cards, merchandise credits, and loyalty rewards will be honored through May 8, 2023. All sales are final during this store closing event. Returns and exchanges for items purchased prior to April 26, 2023, will be accepted in accordance with usual policies through close of business on Wednesday, May 24, 2023, local time. About Hilco Global Hilco Merchant Resources is a division of Hilco Global -- http://www.hilcoglobal.com.Hilco Global is a privately held diversified financial services company and the world's preeminent authority on maximizing the value of assets for both healthy and distressed companies. Hilco Global financial services leverage a unique blend of deep restructuring and advisory experience with capital solutions and principal investing. Hilco Global delivers customized solutions to undervalued, high potential companies to resolve complex and stressed situations and enhance long-term enterprise value. Hilco Global operates as a holding company comprised of over twenty specialized business units that work to help companies understand the value of their assets and as needed monetize the value. Hilco Global has almost 4 decades of a successful track record of acting as an advisor, agent, investor and/or principal in any transaction. Hilco Global works to deliver the best possible result by aligning interests with clients and providing them strategic insight, advice, and, in many instances, the capital required to complete the deal. Hilco Global is based in Northbrook, Illinois and has 700 professionals operating on five continents with US offices located in Boston, Detroit, Chicago, New York, Philadelphia, and internationally in Australia, Canada, UK, Germany, Netherlands, Mexico and throughout Asia. About Gordon Brothers Since 1903, Gordon Brothers -- http://www.gordonbrothers.com-- has helped lenders, management teams, advisors and investors move forward through change. The firm brings a powerful combination of expertise and capital to clients, developing customized solutions on an integrated or standalone basis across four services areas: valuations, dispositions, financing, and investment. Whether to fuel growth or facilitate strategic consolidation, Gordon Brothers partners with companies in the retail, commercial and industrial sectors to provide maximum liquidity, put assets to their highest and best use and mitigate liabilities. The firm conducts more than $100 billion worth of dispositions and appraisals annually and provides both short- and long-term capital to clients undergoing transformation. Gordon Brothers lends against and invests in brands, real estate, inventory, receivables, machinery, equipment, and other assets, both together and individually, to provide clients liquidity solutions beyond its market-leading disposition and appraisal services. The firm is headquartered in Boston, with over 30 offices across five continents. About Tiger Capital Group Tiger Capital Group -- http://www.tigergroup.com-- provides asset valuation, advisory and disposition services to a broad range of retail, wholesale, and industrial clients. With over 40 years of experience and significant financial backing, Tiger offers a uniquely nimble combination of expertise, innovation, and financial resources to drive results. Tiger's seasoned professionals help clients identify the underlying value of assets, monitor asset risk factors and, when needed, provide capital, or convert assets to capital quickly and decisively. Tiger maintains offices in New York, Los Angeles, Boston, Chicago, Houston, and Toronto. About B. Riley Retail Solutions B. Riley Retail Solutions -- http://www.brileyretailsolutions.com -- is a leading provider of asset disposition services specializing in large-scale retail liquidations. The firm efficiently leverages its sector expertise and deploys resources to assist companies, lenders, capital providers, private equity investors and professional services firms in maximizing the value of their assets. B. Riley Retail Solutions is a subsidiary of B. Riley Financial (Nasdaq: RILY), a diversified financial services platform that delivers tailored solutions to meet the strategic, operational, and capital needs of its clients and partners. Through its affiliated subsidiaries, B. Riley provides end-to-end financial services across investment banking, institutional brokerage, private wealth and investment management, financial consulting, corporate restructuring, operations management, risk and compliance, due diligence, forensic accounting, litigation support, appraisal and valuation, auction, and liquidation services. B. Riley opportunistically invests to benefit its shareholders, and certain affiliates originate and underwrite senior secured loans for asset-rich companies. Founded in 1997, B. Riley is headquartered in Los Angeles with more than 2,000 affiliated personnel in over 200 locations across the U.S. and internationally, including Canada, Europe, and Australia. About Bed Bath & Beyond Bed Bath & Beyond Inc., together with its subsidiaries, is an omnichannel retailer selling a wide assortment of merchandise in the Home, Baby, Beauty & Wellness markets and operates under the names Bed Bath & Beyond, buybuy BABY, and Harmon, Harmon Face Values. The Company also operates Decorist, an online interior design platform that provides personalized home design services. At its peak, Bed Bath & Beyond operated the largest home furnishing retailer in the United States with over 970 stores across all 50 states, consistently at the forefront of major home and bath trends. Operating stores spanning the United States, Canada, Mexico, and Puerto Rico, Bed Bath & Beyond offers everything from bed linens to cookware to electric appliances, home organization, baby care, and more. Bed Bath & Beyond closed over 430 locations across the United States and Canada before filing chapter 11 cases, implementing full scale winddowns of their Canadian business and the Harmon branded stores. Left with 360 Bed Bath & Beyond and 120 buybuy BABY stores, Bed Bath & Beyond Inc. and 73 affiliated debtors on April 23, 2023, each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code to pursue a wind down of operations. The cases are pending before the Honorable Vincent F. Papalia and have requested joint administration of the cases under Bankr. D.N.J. Lead Case No. 23-13359. Kirkland & Ellis LLP and Cole Schotz P.C. are serving as legal counsel, Lazard FrÃƒÂ¨res & Co. LLC is serving as investment banker, and AlixPartners LLP is serving as financial advisor. Bed Bath & Beyond Inc. has retained Hilco Merchant Resources LLC to assist with inventory sales. Kroll LLC is the claims agent. BEVERLY COMMUNITY: S&P Cuts 2015/2017 Revenue Bonds Rating to 'D' ----------------------------------------------------------------- S&P Global Ratings lowered its long-term rating to 'D' from 'CC' on the California Statewide Communities Development Authority's series 2015 and 2017 revenue bonds, issued for the Beverly Community Hospital Assn., and removed the rating from CreditWatch with negative implications. "The 'D' rating reflects that Beverly Community Hospital Assn. (together with its related entities) filed a bankruptcy petition on April 19, 2023," said S&P Global Ratings credit analyst Chloe Pickett. Furthermore, on April 26, 2023, the trustee for the series 2015 and 2017 revenue bonds, U.S. Bank, issued a notice of an event of default. The trustee's notice stated that Beverly, along with the other members of the obligated group, have not made nor are expected to make the hospital's May 1, 2023 debt service payment to the trustee on the series 2017 bonds. In addition, the trustee stated that there is no expectation of future debt service payments to be made through the duration of the bankruptcy case and that the trustee does not hold any funds under the indentures. BIO365 LLC: Commences Subchapter V Bankruptcy Case -------------------------------------------------- Bio365 LLC filed for chapter 11 protection in the Northern District of California. The Debtor elected on its voluntary petition to proceed under Subchapter V of chapter 11 of the Bankruptcy Code. The Debtor currently manufactures nine unique, trademarked, and patented living soil products that are custom formulated for indoor, light deprivation, and outdoor cultivators. However, prior to formulating these first-to-market products, the four co-founders of the Debtor set a mutual goal in 2015 to ensure that children and future generations will have access to abundant, healthy food, and high-quality medicine. To do so, they needed to find solutions to the intermingled threat of dwindling topsoil, poor crop quality, and the instability of climate change. These founders determined that "Controlled Environment Agriculture" -- or CEA -- can be an important mechanism to help solve the growing threats to agriculture and the climate. The Debtor's CEA breakthroughs made an immediate impact on the marketplace. In particular, given the CEA advances through the Debtor's proprietary, activated, and aged bioCHARGE, the Debtor's products became the preferred soils in the controlled environment industry to ensure such products are available year-round. The Debtor filed this Bankruptcy Case to restructure and streamline its operations and propose a plan of reorganization to shed its burdensome operational deficiencies and emerge a healthier company buoyed by the strength of its unique product. It is the Debtor's intention to propose a plan of reorganization that will permit the Debtor to maximize recoveries for its legitimate creditors, ensure the Debtor is only paying for the value it has received on its loans and contracts, and reach an EBITDA positive position within 12-18 months after emerging from bankruptcy. According to court filings, Bio365 LLC estimates between $1 million and $10 million in debt to 100 to 199 creditors. The petition states that funds will be available to unsecured creditors. About Bio365 LLC Bio365 LLC produces biologically activated and nutrient dense biochar soils for professional cultivation. Bio365 LLC filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. N.D. Cal. Case No. 23-10180) on April 12, 2023. In the petition filed by Robert Marcus, as chief restructuring officer, the Debtor reported assets and liabilities between $1 million and $10 million each. Honorable Bankruptcy Judge William J Lafferty oversees the case. The Debtor is represented by: Kevin Harvey Morse, Esq. Clark Hill PLC 122 Calistoga Road Suite 613 Santa Rosa, CA 95404 Tel: (312) 985-5556 Email: kmorse@clarkhill.com BLACK DIAMOND: Seeks to Extend Exclusivity Period to June 21 ------------------------------------------------------------ Black Diamond Energy of Delaware, Inc. asks the U.S. Bankruptcy Court for the Western District of Pennsylvania to extend its exclusive periods to file its chapter 11 plan and disclosure statement and solicit acceptances thereof to June 21, 2023. Currently, the Debtor's filing and solicitation exclusivity periods both expire on April 22, 2023. The Debtor stated that it is seeking additional time to resolve ongoing claim disputes. The Debtor explained that the extension will allow it time to assess all creditors and generate an inclusive plan addressing all claims. The Debtor also claims that the extension will allow it to continue to work with its creditors to fostering a plan of reorganization. Black Diamond Energy of Delaware, Inc. is represented by: Donald R. Calaiaro, Esq. CALAIARO VALENCIK 938 Penn Avenue, Suite 501 Pittsburgh, PA 15222-3708 Email: dcalaiaro@c-vlaw.com Tel: (412) 232-0930 About Black Diamond Energy of Delaware Black Diamond Energy of Delaware, Inc. -- https://www.blackdiamondenergy.com/ -- is a company based in Greensburg, Pa., which provides natural gas drilling programs for investor partners. It specializes in coalbed methane play in the Powder River Basin. Black Diamond sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Pa. Case No. 22-21448) on July 26, 2022, with up to $50,000 in assets and $10 million to $50 million in liabilities. Eric Koval, president of Black Diamond, signed the petition. Donald R. Calaiaro, Esq., at Calaiaro Valencik and Eric Rossi CPA, LLC serve as the Debtor's legal counsel and accountant, respectively. BLACKSTONE MORTGAGE: Fitch Affirms BB LongTerm IDR, Outlook Stable ------------------------------------------------------------------ Fitch Ratings has affirmed the Long-Term Issuer Default Rating (IDRs) of Blackstone Mortgage Trust, Inc. (BXMT) at 'BB'. The Rating Outlook is Stable. At the same time, Fitch has affirmed BXMT's secured debt and senior unsecured debt ratings at 'BB' and 'BB-', respectively. KEY RATING DRIVERS The ratings affirmation reflects BXMT's relationship with Blackstone Inc. (Blackstone; A+/Stable) and its affiliate manager, BXMT Advisors L.L.C., which provides BXMT with access to deal flow, investment resources, risk management tools, and bank relationships as part of one of the largest global real estate platforms. The rating also reflects BXMT's solid, albeit modestly deteriorating, asset quality supported by robust underwriting standards; reasonable, consistent cash earnings and solid liquidity. Rating constraints include BXMT's narrow focus on the commercial real estate (CRE) market, with concentrated exposures to office against the backdrop of challenging real estate trends; a predominantly secured funding profile and the distribution requirements associated with being a mortgage real estate investment trust (mREIT). BXMT's asset quality has shown signs of deterioration over recent periods but remains supportive of its current rating. The firm's impaired loans to gross loans ratio rose to approximately 4.0% 1Q23, up from 1.3% at YE 2021 due to the internal downgrade of multiple loans, primarily tied to the office portfolio. While BXMT has reduced its net exposure to office properties to 34% of total loans at 1Q23, the exposure remains higher compared to peers. Fitch believes there remain longer-term uncertainties related to office given the impact of the pandemic on work patterns, which could continue to affect asset quality metrics over the medium term. BXMT's conservative underwriting's focus on higher-quality buildings in locations with solid demographics as well as its asset management capabilities through the broader Blackstone platform should help mitigate the potential for material credit losses to be realized over time. Fitch notes that BXMT's reserve against impaired loans, at approximately 20% of carrying value, should protect its equity base if losses are ultimately realized. Similar to peers, BXMT's profitability declined during 2022 reflecting higher credit provisioning offset by stronger spread revenue from higher rates and a larger balance sheet. BXMT's pre-tax ROA was 1.1% in 2022 compared with a four-year average (2019-2022) of 1.5%, which was within Fitch's 'bb' category earnings benchmark range of 1.0%-2.5% for balance sheet heavy finance and leasing companies and an operating environment score in the 'bbb' category. The firm's pre-tax ROA for the trailing 12 months ended 1Q23 was 1.1%. A sustained reduction in the firm's pre-tax ROA to below 1% would be viewed negatively by Fitch. BXMT's leverage (gross debt-to-tangible equity including off-balance sheet, non-recourse funding comprised of CLO liabilities, senior syndications and loan participations), though higher than peers, remains supportive of its current rating, at 4.9x at 1Q23. This was towards the lower-end of Fitch's 'bb' category benchmark range of 4x-7x for balance sheet heavy finance and leasing companies with an operating environment score in the 'bbb' category. BXMT targets net debt leverage below 4.0x, excluding non-recourse and off-balance sheet debt net of unrestricted cash. On this basis, leverage was 3.8x at 1Q23. While Fitch expects leverage to remain elevated compared to peers throughout 2023, Fitch believes the firm's ability to retain earnings given its over-distributed position on a tax basis, combined with a more muted lending environment could allow for modest de-leveraging. An inability to sustain leverage below 5.0x, based on Fitch's calculation could result in negative rating action. BXMT's unsecured funding is below that of rated peers, representing less than 3% of on-balance-sheet debt at 1Q23, which was within Fitch's 'b or below' benchmark range of less than 10% for balance sheet heavy finance and leasing companies. The firm has historically relied on secured bank financing facilities, non-recourse securitizations and the secured Term Loan B market for funding, which it accessed multiple times during 2022. While Fitch views BXMT's ability to cost-effectively access the secured debt markets favorably, an increase in the unsecured funding mix would enhance its financial flexibility and would be a credit positive. As a REIT, BXMT is required to distribute at least 90% of its annual net taxable income to shareholders, which constrains the firm's ability to build equity and Fitch's assessment of its liquidity. At 1Q23, the company had $516 million of cash and equivalents and $1.0 billion of borrowing capacity on its funding lines, which Fitch believes is sufficient to address funding needs, including loan funding commitments and debt repayment obligations in 2023. Fitch also notes that BXMT's debt facilities have no capital markets mark-to-market attributes, are match -funded and are over-collateralized with commitments from lenders such that the $1.0 billion of availability at 1Q23 is readily available. The Stable Outlook reflects Fitch's expectations for BXMT to show a strong ability to navigate headwinds within the CRE sector such that credit quality remains solid resulting in consistent earnings performance, the maintenance of Fitch-calculated leverage at-or-below 5x and a solid liquidity profile. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Sustained increase in Fitch-calculated leverage above 5.0x and/or a sustained increase in company-calculated leverage above 4.0x; - Inability to maintain sufficient liquidity relative to near-term debt maturities, unfunded commitments and margin call potential associated with collateral loan nonperformance or material credit deterioration; - Material deterioration in credit performance whereby impaired and nonperforming loans are above 4.0% of loans for an extended period and meaningful credit losses are ultimately realized impaction cash earnings; - Sustained reduction in pre-tax ROA at or below 1.0%. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Given current macroeconomic conditions as well as sector headwinds related to commercial real estate, near-term positive rating action is considered unlikely. However, over the longer-term, the following could lead to positive rating actions: - Sustained increase in the proportion of unsecured debt at or above 25% of total debt; - Measured and appropriately risk-adjusted diversification into other CRE asset classes or expansion of business model; - Sustained decrease in Fitch-calculated leverage at-or-below 4.0x; - Exhibited ability to manage credit quality deterioration with minimal realized credit losses such that pre-tax ROA and/or DE remain in line with historical performance. DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS The rating on the secured debt is equalized with the Long-Term IDR, indicating Fitch's expectation for average recovery prospects. The rating on the unsecured debt is notched down from BXMT's Long-Term IDR, and reflects the predominantly secured funding mix and the limited size of the unencumbered asset pool, which suggests below average recovery prospects in a stressed scenario. DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES The secured and unsecured debt ratings are primarily linked to changes in the Long-Term IDR and would be expected to move in tandem. However, a material change in the funding mix or collateral pool for each class of debt could result in the ratings being notched up or down from the IDR depending on how recovery prospects are impacted. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Entity/Debt Rating Prior ----------- ------ ----- Blackstone Mortgage Trust, Inc. LT IDR BB Affirmed BB senior unsecured LT BB- Affirmed BB- senior secured LT BB Affirmed BB BLINK CHARGING: Closes Envoy Acquisition in $35.5 Million Deal -------------------------------------------------------------- Blink Charging Co., Blink Mobility, LLC, a wholly-owned subsidiary of the Company, and Mobility Merger Sub Inc., a wholly-owned subsidiary of Mobility, entered into and, after all parties met the closing conditions, consummated the transactions contemplated under an Agreement and Plan of Merger, dated as of April 18, 2023, with Envoy Technologies, Inc. Pursuant to the Acquisition Agreement, Mobility Merger Sub merged with and into Envoy, whereupon the separate corporate existence of Mobility Merger Sub ceased, and Envoy was the surviving corporation of the merger and a wholly-owned subsidiary of Mobility. Envoy is a car sharing platform with an iOS/Android app that provides on-demand electric vehicles as an amenity to apartments, office buildings and hotels. The Company equips real estate owners and operators with a new and innovative way to enhance the lifestyle of their tenants, members and guests by providing "Mobility as an Amenity service," a platform that offers a technology to reserve and access vehicles, driver insurance, maintenance, electric vehicle chargers, electric fleet, fleet maintenance, full-service mobile app, customer support and robust analytics. Envoy provides the technology, operations and vehicles to implement private and dedicated auto-sharing as an amenity for any community. Under the terms of the Acquisition Agreement, the acquisition consideration was up to $35,500,000, paid as follows: (i) $6,000,000 in cash paid upon the closing of the Acquisition Agreement; (ii) a promissory note of Mobility in the principal amount of $5,000,000; (iii) a promissory note of Mobility in the principal amount of $2,000,000; and (iv)(a) in the event of an initial public offering or direct listing of Mobility or Mobility's successor within 24 months after the Closing (and shares of common stock of the Company are not issued in lieu thereof), $18,500,000, $21,000,000 or $22,500,000 worth of shares of common stock of Mobility or Mobility's successor, depending on the timing of such offering or listing, (b) in the event there is no initial public offering or direct listing of Mobility or Mobility's successor within 24 months after the Closing, $21,000,000 worth of shares of common stock of the Company, or (c) at the Company's option, a combination of cash and common stock of the Company with an aggregate value of $21,000,000. The payment of shares of common stock of Mobility or Mobility's successor, if any, will be based on the public offering price per share of such stock in the initial public offering. The payment of shares of common stock of the Company, if any, will be based on the average of the daily-weighted average prices for such stock on each of the 60 days ending on the day prior to issuance thereof. The shares of common stock of the Company that may be issued are subject to a leak-out agreement for a period of 120 days following the issuance thereof whereby recipients of such stock may sell no more than up to 1% of such stock held by such recipient on any trading day, and up to 20% of such stock held by such recipient during any given month. The shares of common stock of Mobility or Mobility's successor that may be issued are subject to any lock-up or leak-out plan in accordance with applicable federal securities laws and customary lock-up provisions. Each of the equityholders of Envoy will receive registration rights in respect of the shares of common stock of Mobility or Mobility's successor issued to such equityholder pursuant to a registration rights agreement. Additionally, certain key employees of Envoy entered into employment offer letters with Mobility, including Aric Ohana, who will be the Chief Executive Officer of the Company's Envoy subsidiary following the Closing. In order to comply with the market rules of The NASDAQ Stock Market, the Acquisition Agreement includes a "share cap" to limit the number of shares that can be issued under the Acquisition Agreement to less than 20% of the Company's current outstanding shares. Prior to entering into the Acquisition Agreement, neither Envoy nor any Envoy stockholder had any material relationship or association with the Company, except for that certain Master Software Development and License Agreement between Envoy and Mobility for Envoy's development of a consumer application, mobile backend, and administrative web backend to operate a carsharing program with the City of Los Angeles for Mobility's wholly-owned subsidiary, BlueLA Carsharing LLC. The acquisition consideration was determined as a result of arm's-length negotiations between the parties. There are presently no significant changes anticipated in the business or product lines of either the Company or Envoy. About Blink Charging Based in Miami Beach, Florida, Blink Charging Co. (OTC: CCGID) f/k/a Car Charging Group Inc. -- http://www.CarCharging.com-- is an owner and operator of electric vehicle (EV) charging equipment and has sold or deployed over 66,000 chargers, many of which are networked EV charging stations, enabling EV drivers to easily charge at any of Blink's charging locations worldwide. Blink's principal line of products and services is its nationwide Blink EV charging networks and Blink EV charging equipment, also known as electric vehicle supply equipment ("EVSE"), and other EV related services, and the products and services of recent acquisitions, including SemaConnect, EB Charging, Blue Corner and BlueLA. Blink Charging reported a net loss of $91.56 million in 2022, a net loss of $55.12 million in 2021, a net loss of $17.85 million in 2020, a net loss of $9.65 million in 2019, and a net loss of $3.42 million in 2018. * * * This concludes the Troubled Company Reporter's coverage of Blink Charging until facts and circumstances, if any, emerge that demonstrate financial or operational strain or difficulty at a level sufficient to warrant renewed coverage. BRACKET INTERMEDIATE: Moody's Affirms 'B3' CFR on Refinancing ------------------------------------------------------------- Moody's Investors Service affirmed Bracket Intermediate Holding Corp.'s (d/b/a "Signant Health") B3 Corporate Family Rating and B3-PD Probability of Default Rating. Concurrently, Moody's assigned a B3 rating to Signant Health's proposed senior secured first lien bank credit facility, comprised of an $80 million revolving credit facility expiring in 2028, $850 million term loan due in 2028 and $130 million delayed draw term loan due in 2028. The outlook remains stable. Proceeds from the new $850 million term loan will be used to fully repay the company's existing $581 million first lien term loan and $230 million second lien term loan (unrated), along with paying transaction fees and expenses. Additionally, the new $130 million delayed draw term loan will effectively be fully used to fund a pending acquisition. Upon close of the refinancing transaction, Moody's will withdraw the ratings on the existing first lien bank credit facility concurrent with the associated repayment of Signant Health's debt obligations. The affirmation of Signant Health's ratings reflects the extension of maturities of the company's debt. The rating affirmation also reflects Moody's view that Signant Health will remain highly concentrated in the niche medical research support services segment and that pro forma financial leverage will remain high over the next 12 to 18 months. Affirmations: Issuer: Bracket Intermediate Holding Corp. Corporate Family Rating, Affirmed B3 Probability of Default Rating, Affirmed B3-PD Assignments: Issuer: Bracket Intermediate Holding Corp. Backed Senior Secured 1st Lien Term Loan, Assigned B3 Backed Senior Secured 1st Lien Delayed Draw Term Loan, Assigned B3 Backed Senior Secured 1st Lien Revolving Credit Facility, Assigned B3 Outlook Actions: Issuer: Bracket Intermediate Holding Corp. Outlook, Remains Stable RATINGS RATIONALE Signant Health's B3 Corporate Family Rating reflects the company's modest, albeit growing, size and scale within the niche medical research support services market. The company has a narrow focus on providing clinical trial technology and specialty services, specifically with its electronic Clinical Outcomes Assessment ("eCOA") offering, to its customers, comprised mainly of large pharmaceutical firms and, to a lesser extent, contract research organizations. The rating is also constrained by Signant Health's high pro forma financial leverage with debt/EBITDA of approximately 6.9x for the last twelve month period ended December 31, 2022, as well as potential for aggressive financial policies under private equity ownership. The ratings are supported by Signant Health's strong EBITDA margins, good revenue visibility provided by its backlog, as well as very good liquidity supported by positive free cash flow generation aided by the company's asset-light business model. Signant Health's ratings are also supported by favorable long-term market trends in the pharmaceutical industry and within the clinical outcome assessment market. Moody's expects Signant Health to maintain very good liquidity over the next 12 months. Pro forma for the refinancing transaction, the company will have approximately $68 million of cash on hand. Moody's expects the company to generate positive free cash flow of approximately $20 million in the next 12 months, which excludes mandatory first lien term loan amortization. Signant Health will have access to an $80 million revolving credit facility, which will expire in 2028. Moody's anticipates ample cushion under the springing first lien net leverage covenant on the revolving credit facility, if triggered. The B3 rating of Signant Health's new senior secured first lien bank credit facility, comprised of an $80 million revolving credit facility, $850 million term loan and $130 million delayed draw term loan, is the same as the B3 CFR. This reflects the first lien secured credit facility representing the preponderance of debt within the company's capital structure. The outlook is stable. Moody's expects that Signant Health's financial leverage will remain high, with debt/EBITDA in the 6.0x-6.5x range based on Moody's adjustments over the next 12 to 18 months. In addition, the company will remain highly concentrated in the niche medical research support services segment. ESG CONSIDERATIONS Bracket Intermediate's ESG credit impact score is CIS-4 indicating high risk exposure to governance risk considerations, most notably with aggressive financial policies under private equity ownership (G-4). The company has a track record of incurring additional debt to fund acquisitions, which Moody's expects to continue. As proposed, the new credit facilities are expected to provide covenant flexibility that if utilized could negatively impact creditors. Notable terms include the following: Incremental debt capacity up to (A) the greater of $160 million and 100% of consolidated EBITDA plus (B) amounts reallocated from the general debt basket, plus (C) an additional amount subject to 5.25x net First Lien Leverage Ratio (if pari passu secured). No portion of the incremental may be incurred with an earlier maturity than the initial term loans. The credit agreement permits the transfer of assets to unrestricted subsidiaries, subject to carve-out capacity and other conditions, as well as "J. Crew" blocker provisions TBD. Non-wholly-owned subsidiaries are not required to provide guarantees; dividends or transfers resulting in partial ownership of subsidiary guarantors could jeopardize guarantees, subject to protective "Chewy" provisions TBD. The credit agreement provides "Serta" provisions TBD limiting up-tiering transactions. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Signant Health exhibits sustained revenue and earnings growth. Ratings could also be upgraded if the company effectively manages its growth strategy while achieving greater scale. Ratings could be upgraded if the company demonstrates consistent and robust positive free cash flow generation. Quantitatively, ratings could be upgraded if debt/EBITDA is sustained below 6 times on a Moody's basis. The ratings could be downgraded if the company experiences weakness in revenues or profitability. Ratings could also be downgraded if there was a deterioration in liquidity including negative free cash flow on a sustained basis. Lastly, ratings could be downgraded if the company undertakes material debt-financed shareholder initiatives or acquisitions. Headquartered in Blue Bell, Pennsylvania, Bracket Intermediate Holding Corp. (dba "Signant Health") is a provider of medical research support services. The company offers clinical trial data collection and storage, as well as provides training and certification services to pharmaceutical and healthcare organizations sponsoring or involved in the clinical trial of drugs. Signant Health generated net revenues of approximately $450 million for the last twelve-month period ended December 31, 2022. Signant Health is owned by private equity firm Genstar. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. BURGER BOSSCO: S&P Downgrades ICR to 'D' on Recapitalization ------------------------------------------------------------ S&P Global Ratings lowered its issuer credit rating on Burger BossCo Intermediate Inc. to 'D' from 'CCC-'. S&P also lowered the issue-level ratings on Burger BossCo's first-lien term loan and revolving credit facility to 'D' from 'CCC-'. The downgrade follows an announcement by the company that it entered into an agreement with its lenders to address an upcoming maturity as it finalizes terms of a recapitalization. Given the April 25, 2023 maturity and expected recapitalization, we believe that the recently executed agreement constitutes a default because Burger BossCo failed to pay its obligations as they came due. The current capital structure contains pay-in-kind obligations that present significant challenges to the company's ability to execute its business improvement plan. In S&P's view, liquidity will remain challenged with virtually no availability under the revolver. S&P said, "We expect the upcoming recapitalization will deleverage the balance sheet and strengthen liquidity. We believe it is likely that Burger BossCo will not refinance all of its debt at par. Therefore, we believe the recapitalization transaction will likely be a distressed exchange and address the company's entire capital structure. "We expect to review our issuer credit rating and issue-level ratings on Burger BossCo upon execution of the anticipated recapitalization transaction. We anticipate raising our issuer credit rating to the 'CCC' rating category." C & A TRANSPORTATION: Wins Cash Collateral Access Thru May 31 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Georgia, Maco Division, authorized C & A Transportation, Inc. to use cash collateral on an interim basis in accordance with its agreement with M&T Equipment Finance Corporation f/k/a People's United Equipment Finance Corp. As of the Petition Date, M&T Equipment alleges it held a secured claim in the amount of $343,242 and an additional contingent secured claim of $36,318 if M&T Equipment's collateral is liquidated. Those claims arose from: -- A Promissory Note entered into and executed by the Debtor in favor of M&T Equipment Bank on March 15, 2022, for a total payment amount of $436,224, consisting of principal in the amount of $359,953, with interest accruing at the rate of 9.35% per annum prior to default and 24% per annum after default and repayable in 48 regular payments of $9,088. The Note renewed a Promissory Note entered into and executed by the Debtor in favor of M&T Equipment Bank on June 12, 2019 and extended additional credit related to the purchase of 10 2020 Hyundai Translead Van Trailers. -- A Security Agreement entered into and executed by the Debtor in favor of M&T Equipment on June 12, 2019 and a Security Agreement entered into and executed by the Debtor in favor of M&T Equipment on March 15, 2022. The Debtor is permitted to use the cash collateral of M&T Equipment until and including May 31, 2023. As adequate protection, beginning on April 1, 2023, and continuing on the first day of each month thereafter, the Debtor will pay M&T Equipment monthly installment payments of $7,577. As adequate protection to M&T Equipment for the Debtor's use of the M&T Equipment Cash Collateral, M&T Equipment is granted a replacement lien nunc pro tunc on and in all property acquired or generated post-petition by the Debtor arising from or generated by the M&T Equipment Collateral. The lien created will: (i) secure the return to M&T Equipment of the M&T Collateral, including all cash and non-cash collateral, utilized by Debtor pursuant to the Order; (ii) where such lien constitutes a first lien, have priority over any and all claims and expenses in the case; and (iii) be subordinate only to enforceable and perfected liens and security interests in existence at the time the case was commenced with a priority senior to the priority of the security interest in favor of M&T Equipment. To the extent that all liens granted on the post-petition assets of the Debtor in favor of M&T Equipment are insufficient to compensate M&T Equipment in full for the post-petition amounts due by the Debtor or any subsequent trustee of the Debtor's Estate, M&T Equipment is granted an administrative expense priority claim with priority over all administrative expenses of any kind whatsoever incurred in the reorganization, except for an administrative expense priority claim arising under a Chapter 7 case and the Chapter 11 quarterly fees owed to the U.S. Trustee. A further hearing on the matter is set for May 31 at 11 a.m. A copy of the order and the Debtor's budget is available at https://bit.ly/420qQvf from PacerMonitor.com. The Debtor projects total operating expenses, on a monthly basis, as follows: $222,200 for April 2023; and $223,100 for May 2023. About C & A Transportation C & A Transportation Inc. -- https://www.catransportation.com/ -- is a professional commercial carrier. C & A Transportation filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. M.D. Ga. Case No. 22-51583) on Dec. 23, 2022, with $1 million to $10 million in both assets and liabilities. Audrey Tidwell, president of C & A Transportation, signed the petition. Robert Matson has been appointed the Subchapter V Trustee. The Debtor is represented by R. Braden Copeland, Esq., at Stone & Baxter, LLP. CANOO INC: Signs $48 Million Securities Purchase Deal With YA II ---------------------------------------------------------------- Canoo Inc. entered into a securities purchase agreement on April 24 with YA II PN, Ltd., in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $48,000,000. The Convertible Debentures bear interest at a rate of 1.0% per annum, subject to increase to 15.0% per annum upon the occurrence of certain events of default, and will mature on June 24, 2024, unless earlier converted or redeemed. The Convertible Debentures have an original issue discount of 6.0% resulting in gross proceeds to the Company before expenses of $45,120,000. The Convertible Debentures are convertible at the option of the holder into a number of shares of the Company's common stock, par value $0.0001 per share, equal to the applicable Conversion Amount divided by the lower of (i) $1.00 per share (the "Fixed Conversion Price") and (ii) 95% of the lowest daily volume-weighted average price of the Common Stock during the five consecutive trading days immediately preceding the applicable conversion date (the "Variable Conversion Price"), provided that in no event shall the Variable Conversion Price be less than 20% of the closing price of the Common Stock on April 24, 2023. The Convertible Debentures may be converted in whole or in part, at any time and from time to time, provided that Convertible Debentures may only be converted at the Fixed Conversion Price until June 24, 2023, subject to certain exceptions. The Conversion Amount with respect to any requested conversion will equal the principal amount requested to be converted plus all accrued and unpaid interest on the Convertible Debentures as of such conversion. In addition, no conversion will be permitted to the extent that, after giving effect to such conversion, the holder together with the certain related parties would beneficially own in excess of 9.99% of the Common Stock outstanding immediately after giving effect to such conversion, subject to certain adjustments. The Company shall not issue any Common Stock upon conversion of the Convertible Debentures if the issuance of such shares of Common Stock would exceed 95,448,226 (which number of shares represents approximately 19.99% of the aggregate number of shares of Common Stock issued and outstanding as of the Agreement Date). The Exchange Cap will not apply under certain circumstances, including if the Company obtains the approval of its stockholders as required by the applicable rules of the Nasdaq Global Select Market for issuances of shares of Common Stock in excess of such amount. The Convertible Debenture provides the Company, subject to certain conditions, with an optional redemption right pursuant to which the Company, upon 10 business days' prior written notice to Yorkville, may redeem, in whole or in part, all amounts outstanding under the Convertible Debenture; provided that the trading price of the Common Stock is less than the Fixed Conversion Price at the time of the Redemption Notice. The redemption amount shall be equal to the outstanding principal balance being redeemed by the Company, plus the redemption premium of 5% of the principal amount being redeemed, plus all accrued and unpaid interest in respect of such redeemed principal amount. Upon the occurrence of certain trigger events, the Company will be required to make monthly cash payments of principal in the amount of $7,500,000 (or such lesser amount as may then be outstanding) plus a premium equal to 5% of such principal amount plus all accrued and unpaid interest as of such payment. Such payments will commence 10 trading days following the occurrence of a trigger event and continue on a monthly basis thereafter until the Convertible Debentures are repaid in full or until the conditions causing the trigger event are addressed in the manner provided for in the Convertible Debentures. In connection with the execution of the Purchase Agreement, the Company and Yorkville also agreed to an adjustment to the exercise price of the warrants to acquire 34,230,870 shares of Common Stock issued pursuant to the supplemental agreement, dated Dec. 31, 2022, by and between the Company and Yorkville. Pursuant to the parties' agreement, the exercise price of the Warrants have been adjusted to $0.62 per share. The offering of the Convertible Debentures and the underlying shares of Common Stock is being made pursuant to a registration statement on Form S-3 (File No. 333-266666), which was filed by the Company with the Securities and Exchange Commission on Aug. 8, 2022, and declared effective on Aug. 17, 2022, as supplemented by a prospectus supplement dated April 24, 2023. About Canoo Torrance, California-based Canoo Inc. -- www.canoo.com -- is a mobility technology company with a mission to bring electric vehicles to everyone and provide connected services that improve the vehicle ownership experience. The Company is developing a technology platform that it believes will enable the Company to rapidly innovate and bring new products, addressing multiple use cases, to market faster than its competition and at lower cost. Canoo reported a net loss and comprehensive loss of $487.69 million for the year ended Dec. 31, 2022, compared to a net loss and comprehensive loss of $346.77 million for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $496.47 million in total assets, $259.90 million in total liabilities, and $236.57 million in total stockholders' equity. Los Angeles, California-based Deloitte & Touche LLP, the Company's auditor since 2021, issued a "going concern" qualification in its report dated March 30, 2023, citing that the Company has suffered recurring losses from operations, has generated recurring negative cash flows from operating activities, and expects to continue to incur net losses and negative cash flows from operating activities in accordance with its ongoing activities. These matters raise substantial doubt about the Company's ability to continue as a going concern. CASELLA WASTE: GFL Environmental Deal No Impact on Moody's Ba2 CFR ------------------------------------------------------------------ Moody's Investors Service said the announcement by Casella Waste Systems, Inc. that it has signed a definitive agreement to purchase select assets of GFL Environmental Inc. (GFL, rated B1) with debt is credit negative. However, there is currently no impact to Casella's Ba2 corporate family rating or stable outlook. Casella will spend $525 million to purchase operations of GFL in Pennsylvania, Delaware and Maryland, focused on waste collection, transfer and recycling. The transaction is expected to be funded via a new term loan and revolver borrowings and close by the end of Q3 2023, subject to customary closing conditions. Moody's views the sizeable all debt-funded transaction as credit negative because it will materially increase Casella's financial leverage. Moody's estimates adjusted pro forma debt-to-LTM EBITDA (at December 31, 2022) to approach 4.2x on a pro forma basis, from about 2.8x prior to the transaction. While the company is adding complementary businesses in new markets, it faces competition in these markets from the leading players in the industry as well as local providers. The transaction is also occurring amid weakening economic conditions that will exert negative pressure on commercial/industrial end market volumes. However, Casella has indicated it expects to return leverage below the company's net leverage target of 3.25x, from a pro forma level of 3.59x (at December 31, 2022). The company has a good track record of execution, resulting in steady improvement in credit metrics in recent years, aided in part by occasional equity raises to strengthen the balance sheet and fund acquisitions. Moody's expects the company to de-leverage towards the pre-acquisition level within a reasonable timeframe. Moody's expect adjusted debt-to-EBITDA to fall steadily towards 3.5x in 2023 and further in 2024, benefiting from favorable pricing conditions in Casella's core region, cost discipline and realization of targeted synergies. The company also benefits from the mostly stable nature of the solid waste industry given that demand is for waste collection and disposal is non-discretionary. Further, the GFL assets will expand Casella's geographic footprint beyond its core US Northeast region to the mid-Atlantic region, considering the company has no operations in Delaware or Maryland, and increase its scale. Casella expects to realize waste internalization benefits as the GFL operations currently pay tipping fees to send waste volumes to third party landfills and transfer stations. These volumes could potentially be redirected to Casella's landfill in Pennsylvania (McKean) via rail in the future. Casella Waste Systems, Inc. is a solid waste management company primarily focused in the Northeast US region (Vermont, New Hampshire, Connecticut, New York, Massachusetts, Maine and Pennsylvania), providing collection, transfer, disposal and recycling services. Revenue was approximately $1.1 billion for the year ended December 31, 2022. CATALINA MARKETING: Court Confirms Prepackaged Reorganization Plan ------------------------------------------------------------------ Catalina, a market leader in shopper intelligence, on April 28 disclosed that the United States Bankruptcy Court for the Southern District of New York ("the Court") has confirmed the company's prepackaged Plan of Reorganization. Catalina expects to close the sale of its Japanese entity, Catalina Marketing Japan K.K., to Yosemite 2 K.K. and successfully emerge from chapter 11 in the coming days. Upon emergence, Catalina will substantially reduce its debt and move forward with a significantly strengthened balance sheet to accelerate investment in strategic growth areas. "We are pleased to have achieved this key milestone in our financial restructuring," said Wayne Powers, President and Chief Executive Officer of Catalina. "Catalina will emerge from this process as a stronger partner to our customers, with greater strategic focus and resources to continue innovating and unlocking relevant new data-driven solutions that deliver meaningful value for all stakeholders." Powers continued, "We were able to achieve this outcome on an accelerated basis thanks to the overwhelming support of Catalina's lenders and the continued trust of our customers, partners and vendors. Most of all, I want to thank the entire Catalina team for their unwavering commitment to serving our customers throughout this process. With this solid financial foundation in place, we are well positioned to grow Catalina's business in the years ahead by focusing on critical investments in AI-enabled data science capabilities, including advanced personalization, measurement as a service, and a portfolio of full funnel marketing solutions that are connected across channels to deliver 1:1 targeted value to consumers." Additional information is available at Catalina's restructuring website at www.catalinarestructuring.com. About Catalina Marketing Catalina Marketing Corporation provides an extensive network of in-store, point-of-sale data acquisition and promotional delivery systems, present in approximately 22,000 retail locations in the U.S. Catalina is currently party to agreements with approximately 59 retailer partners to utilize Catalina's networked servers and high-speed printers at multiple POS locations in each of the retailers' stores. Catalina and several affiliates previously sought Chapter 11 bankruptcy protection on Dec. 12, 2018 with a prepackaged plan that would reduce debt by $1.6 billion. The 2018 lead case was In re Checkout Holding Corp. (Bankr. D. Del. Case No. 18-12794). In the 2018 petition, Catalina disclosed funded debt of $1.9 billion as of the bankruptcy filing. Assets were in the range of $1 billion to $10 billion. On January 31, 2019, the Hon. Kevin Gross confirmed the company's Plan of Reorganization allowing Catalina to reduce debt by more than 80% from about $1.9 billion to about $280 million upon emergence. In the 2018 Plan, first lien lenders owed $55 million on a first lien revolver and $1.02 billion on a first lien term loan were slated to receive their pro rata share of 90% of the equity in the reorganized Debtors, subject to dilution by a contemplated management incentive plan. Second Lien Lenders owed $460 million on a second-lien term loan will receive their pro rata share of 10% of the New Common Stock, subject to dilution. Allowed general unsecured claims were paid in the ordinary course and otherwise unimpaired. Catalina Marketing and 14 affiliated entities sought Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York on March 28, 2023. Affiliate PacificCo Inc. (Bankr. S.D.N.Y. Case No. 23-10470) is the lead case. The Debtors listed $100 million to $500 million in estimated assets and liabilities on a consolidated basis. The petitions were signed by Michael Huffmaster as chief financial officer. The Hon. Philip Bentley oversees the new cases. Garty T. Holtzer, Esq., Kevin Bostel, Esq., and Rachael Foust, Esq., at Weil, Gotshal & Manges LLP, serve as the Debtors' counsel. FTI Consulting, Inc., serves as the Debtors' financial advisor. Houlihan Lokey is the Debtors' investment banker. Kurtzman Carson Consultants LLC is the Debtors' claims, noticing and solicitation agent. CLIENT FIRST: Two Creditors Say Liquidating Plan Not Feasible ------------------------------------------------------------- Creditors Nobility Settlement Funding, LLC and Daniel Silverman objects to the confirmation of the Joint Plan of Liquidation for Small Business of Client First Settlement Funding, LLC ("CFSF") and Client First Lotteries, LLC ("CFL"). Creditors claim that the Debtors' Plan is not workable, there is not a reasonable prospect of its success, and thus, it is not feasible. The success of the Plan hinges entirely upon the Debtors' ability to seemingly alter and accelerate the existing payment structure under the Nobility Settlement Agreement. Without such success, the Debtors cannot pay any of their administrative expense claims, let alone distribute a dime to creditors. Creditors point out that without even resorting to a discussion of the merits of the Debtors' ability to somehow alter the Agreement, it must be asked how do the Debtors intend to fund this expensive litigation. The Debtors' Plan provides zero explanation to this most salient question. In order for the Debtors' Plan to be feasible, it is critical that the Debtors have the means to prosecute such litigation. Additionally, in the event the Debtors are unsuccessful in pursuing this litigation, the Debtors will have exposed the estate to significant additional administrative expenses. Moreover, the Plan provides no mechanism to pay these potential new administrative claims; the Plan provides no backstop or reserve account where such funds will be escrowed. Creditors assert that the Debtors misrepresent that the Plan is a plan of liquidation. In reality, the Plan is a disguised plan of reorganization that would never be accepted if proposed as such. It is clear from the Plan that the Debtors intend to reorganize and continue their businesses with their current president, Burt Kroner, at the helm and with the same officers, partners, directors, members, and managers. Creditors further assert that the Debtors should not have the discretion to forego the sale of the database and to retain the database free and clear. Additionally, if the upgrades and enhancements are truly necessary, the Debtors should not be permitted to pay their own president, Burt Kroner, substantial sums to do them without first shopping for more economical, non-insider alternatives. Finally, in order to assume the Nobility Settlement Agreement, the Debtors will be required to cure any defaults existing under the agreement. The Debtor cannot assume the good parts of the contract without the bad. Here, the bad for the Debtors include the provisions of the Agreement pertaining to indemnification and payment of Nobility's attorneys' fee. Based on the positions taken by the Debtors in this Case, this would also include payment of Nobility's attorneys' fees incurred to date defending the Debtors' attempts at enforcing the Agreement. Unless and until all defaults under the Agreement are fully and promptly cured, Nobility objects to the assumption of the Agreement. A full-text copy of Creditors' objection dated April 25, 2023 is available at https://bit.ly/422MUp4 from PacerMonitor.com at no charge. Counsel for Nobility Settlement Funding, LLC and Daniel Silverman: LANDAU LAW, PLLC Philip J. Landau, Esq. Jessica F. Haffkoss, Esq. 3010 N. Military Trail, Suite 318 Boca Raton, Florida 33431 Telephone: 561-443-0802 Email: phil@landau.law About Client First Settlement Funding Client First Settlement Funding, LLC specializes in purchasing and selling structured settlements and annuities nationwide. Client First Settlement Funding and Client First Lotteries filed petitions for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Lead Case No. 22-18262) on Oct. 26, 2022. Aleida Martinez-Molina has been appointed as Subchapter V trustee. At the time of the filing, Client First Settlement Funding listed between $1 million and $10 million in both assets and liabilities while Client First Lotteries listed up to $50,000 in assets and up to $1 million in liabilities. Judge Mindy A. Mora oversees the cases. The Debtors are represented by Aaron A. Wernick, Esq., at Wernick Law, PLLC. COHU INC: S&P Upgrades ICR to 'BB-', Outlook Stable --------------------------------------------------- S&P Global Ratings raised its issuer credit rating on U.S.-based back-end semiconductor equipment and services provider Cohu Inc. to 'BB-' from 'B+'. The outlook is stable. S&P also raised its rating on the company's first-lien term loan to 'BB-' from 'B+'. The '3' recovery rating is unchanged. S&P said, "The stable outlook reflects our view that S&P Global Ratings'-adjusted EBITDA margins in the high-teens percentage area should support the company's ability to generate sufficient free cash flow and maintain leverage under 3x through industry cycles. "The upgrade reflects our expectation that Cohu will sustain its improvements in profitability and credit metrics, keeping leverage under 1.5x over the next 12 months even as the semiconductor industry faces a significant downturn. Cohu has reduced leverage considerably over the past two years, bringing S&P Global Ratings'-adjusted leverage to about 0.7x as of Dec. 31, 2022, down from 4.5x in 2020. Despite moderate topline weakness in 2022, Cohu achieved considerable margin expansion with S&P Global Ratings'-adjusted EBITDA margins of 24%, about a 110- basis-point (bp) improvement from 2021 and meaningfully higher than 13% in 2020. Over the past two years, the company has steadily improved gross margins through product mix—primarily a greater contribution from premium products such as semiconductor test over lower-margin handler business—and increasing in-sourcing of the interface products in its Asia operations, which drives factory efficiency gains and reduces reliance on higher-cost European and U.S. suppliers. The company has also been able to pass on some of the incremental supply-chain costs to customers through price increases. "Although revenues declined in 2022 and we forecast a further decline in 2023, better expense management and lower leverage will mitigate the impact on credit metrics compared with the 2019 downturn. Cohu reported revenue decline of about 6% in 2022 (pro forma for PCB Test business sale), after a 40% growth in 2021. The company was impacted by industry-wide supply chain issues earlier in 2022, followed by softening demand in the mobility and consumer end markets toward the second half of the year. We expect the semiconductor industry downturn in 2023 to result in about a high-teens percentage decline in revenue and about a 500-bp decline in adjusted EBITDA margins from lower sales volume and lingering IC cost component headwinds. Despite a weaker topline and margin deterioration, we forecast adjusted leverage to be about 1x at the end of 2023, well below our previous 2x upgrade trigger, before furthering deleveraging as the macroeconomic and industry backdrop start improving toward the end of the year." During the last semiconductor downturn in 2019, credit metrics deteriorated significantly due to weak operating performance as well as the additional debt took on to finance the Xcerra transaction, leading to S&P Global Ratings'-adjusted EBITDA margins of 9% and adjusted leverage reaching 8.2x for full-year 2019. Since then, the company's progress on its cost structure, growth in its non-systems business, and disciplined financial policy support S&P's view that it is better positioned to withstand the industry's cyclicality. In addition to improving profitability, Cohu has strengthened its balance sheet with substantial debt prepayment through its solid free cash flow generation, sale of PCB Test business, and public offering. In 2021, Cohu repaid $200 million of its $350 million term loan from the Xcerra acquisition, with $100 million from its March public offering and an additional $100 million from proceeds of the PCB test business sale in June. In 2022, the company prepaid another $32 million of the term loan, resulting in about $67 million outstanding as of Dec. 31, 2022. Cohu's voluntary debt prepayment, coupled with aforementioned strong operating performance, led to significant deleveraging over the last 18 months. While S&P expects leverage to remain low below 1x throughout its forecast period, S&P views future releveraging transactions, in line with the company's publicly stated intention to expand its product portfolio and addressable markets. S&P said, "Our business risk assessment reflects Cohu's relatively small revenue base and niche focus within back-end semiconductor manufacturing equipment and services. We view the semiconductor capital equipment industry as inherently volatile and exposed to macroeconomic and semiconductor industry cycles, as well as typically exhibiting weak near-term operating visibility with little to no recurring revenues. This volatility has been evident in Cohu's past topline performance, particularly through the last industry downturn in 2019 when revenues (pro forma for Xcerra) declined by about 25% year over year. We believe the growing base of non-systems revenue should provide some stability, however, as its consumable-based products are less volatile and more correlated with wafer starts than semiconductor equipment capex. Despite expected fluctuations in its topline, Cohu is well positioned to benefit from several long-term industry growth drivers such as accelerated deployment of 5G handsets supporting the mobility end market and demand for electric vehicle, battery management, and automated driver assist technology supporting the automotive sector. As the semiconductor manufacturing process becomes increasingly complex, Cohu stands to benefit from demand for tools that enable greater yield and productivity. Nevertheless, our rating reflects the company's small revenue base compared with its larger competitors (e.g., Teradyne and Advantest) in the highly fragmented semi-capital equipment supply chain. "We base our stable outlook on Cohu on our view that despite the upcoming semiconductor industry downturn leading to our forecasted revenue decline in 2023, S&P Global Ratings'-adjusted EBITDA margins in the high-teens percentage area should support the company's ability to generate free cash flow of about $80 million. Although we project a material decline in industry capex over the next 12 months, we expect the company's non-systems revenue (representing about half of total revenues) to provide a source of stability during periods of volatility. We expect an improving macroeconomic backdrop toward the end of the year and recovery in 2024 to drive high-single-digit percentage growth annually while maintaining margins in the low- to mid-20% range." S&P could lower its rating if: -- A persistent decline in demand for semi capital equipment depresses cash flow generation and profitability such that S&P expects leverage to remain above 3x or FOCF to debt below 15% for a sustained period; or -- Cohu adopts a more aggressive financial policy including large acquisitions or share repurchases such that it sustains leverage above 3x. While unlikely over the next 12 months due to the company's historical volatility and scale compared with higher-rated peers, S&P could raise the rating if: -- Cohu materially expands its operating scale with greater revenue and more stable EBITDA margins; and -- Demonstrates financial policy that sustains leverage below 1.5x and FOCF to debt above 40%, while incorporating market volatility and acquisitions. ESG credit indicators: E-2; S-2; G-2 ESG factors have had no material influence on S&P's credit rating analysis of Cohu Inc. COLEMAN COMMERCIAL: Small Business Plan Confirmed by Judge ---------------------------------------------------------- Judge Michael E. Romero has entered an order confirming Second Amended Plan of Reorganization for Small Business of Coleman Commercial Properties, Inc. The Debtor has proposed the Plan in good faith and not by means forbidden by law. The Plan provides that any payment made by the Debtor or to be made by the Debtor for services or for costs and expenses in or in connection with the Bankruptcy Case including, but not limited to, the costs and fees incurred by Professionals employed by the Bankruptcy Estate either has been approved by the Bankruptcy Court as reasonable, or remains subject to the approval by the Bankruptcy Court and shall not be paid unless and until the Bankruptcy Court approves such fees. The Plan provides safeguards to ensure that confirmation thereof is not likely to be followed by a liquidation, or need for further financial reorganization, of the Debtor including, but not limited to, the use of reasonable and appropriate methodologies and assumptions to establish that the Debtor will have sufficient funds to meet its obligations under the Plan. Assuming arguendo an Impaired Class had voted to reject the Plan, causing the Debtor to not satisfy Section 1129(a)(8) of the Bankruptcy Code, the Court may confirm the Plan under Section 1191(b) of the Bankruptcy Code as it does not discriminate unfairly and is fair and equitable to each Class of Claims. A copy of the Plan Confirmation Order dated April 25, 2023 is available at https://bit.ly/3Hq5nUC from PacerMonitor.com at no charge. Attorney for Debtor: Stephen E. Berken, 14926 Berken Cloyes, PC 1159 Delaware Street Denver, CO 80202 303-623-4359 stephenberkenlaw@gmail.com About Coleman Commercial Properties Since May of 2006, Coleman Commercial Properties, Inc., has been operating as a sports bar and grill in Aurora, Colorado.Â Â The company operates as McCarthy Sports Bar & Grill, located off Smokey Hill Road and Chambers Road. It is owned and operated by Edward Coleman. Coleman Commercial Properties, Inc., filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. D. Colo. Case No. 22-10666) on March 1, 2022, listing as much as $1 million in both assets and liabilities. Mark David Dennis serves as the Subchapter V trustee. The Debtor tapped Berken Cloyes PC as legal counsel and Carl J. Moser as accountant. COMMUNITY CARE: $330M Bank Debt Trades at 18% Discount ------------------------------------------------------ COMMUNITY CARE: $330.0M Bank Debt Trades at 18% Discount Participations in a syndicated loan under which Community Care Health Network LLC is a borrower were trading in the secondary market around 81.6 cents-on-the-dollar during the week ended Friday, April 28, 2023, according to Bloomberg's Evaluated Pricing service data. The $330 million facility is a Term loan that is scheduled to mature on February 16, 2025. About $314.3 million of the loan is withdrawn and outstanding. Community Care Health Network, Inc., doing business as Matrix Medical Network, provides multidisciplinary care management services. CORELOGIC INC: $750M Bank Debt Trades at 21% Discount ----------------------------------------------------- Participations in a syndicated loan under which CoreLogic Inc is a borrower were trading in the secondary market around 79.0 cents-on-the-dollar during the week ended Friday, April 28, 2023, according to Bloomberg's Evaluated Pricing service data. The $750 million facility is a Term loan that is scheduled to mature on June 4, 2029. The amount is fully drawn and outstanding. CoreLogic, Inc. provides consumer, financial and property information, analytics and services. The Company combines public, contributory and proprietary data to develop predictive decision analytics, as well as offers mortgage and automotive credit reporting, property tax, valuation, flood determination, and geospatial analytics and services. CORNERSTONE ONSITE: Taps Bright Balance as Accountant ----------------------------------------------------- Cornerstone Onsite, LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Bright Balance Accounting, LLC as its accountant. The firm's services include: -- gathering financial information for the Debtor to prepare and file its tax returns, monthly operating reports and other financial reports; -- recording results and supporting schedules of financial operations within Quickbooks; and -- assisting with the preparation of budgets and cash flow analysis necessary for the Debtor's Chapter 11 plan and other financial projections as required. The firm will be paid at these rates: Technical Accounting $200 per hour CFO Advisor/Controller $200 per hour Accounting Dir/Mgr. $150 per hour Sr. Financial Analyst $115 per hour Sr. Accountant $100 per hour Financial Analyst (offshore) $35 per hour Staff Accountant (offshore) $24 per hour The retainer is $5,000. John White, a partner at Bright Balance Accounting, disclosed in a court filing that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: John D. White Bright Balance Accounting, LLC 12222 Merit Dr, Suite 1030 Dallas TX 75251 Tel: (214) 683-6944 About Cornerstone Onsite Cornerstone Onsite, LLC, doing business as Dent Well, is a dental services organization and operates or manages 13 dental offices and one mobile unit in Texas, California, North Carolina and Utah. Its central business office is at 7575 San Felipe St., Suite 101, Houston, Texas. The company 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 those dental entities are dentists and neither the dental entities nor the dentists have filed bankruptcy. Cornerstone Onsite sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas Case No. 23-30949) on March 17, 2023, with approximately $1.8 million in assets and $4.6 million in debt. John D. White, chairman of Cornerstone Onsite, signed the petition. Judge Jeffrey P. Norman oversees the case. John Akard Jr., Esq., at Coplen & Banks, PC, represents the Debtor as legal counsel. CORONET CERAMICS: Starts Subchapter V Bankruptcy Proceeding ----------------------------------------------------------- Coronet Ceramics Inc. filed for chapter 11 protection in the District of Nevada. The Debtor elected on its voluntary petition to proceed under Subchapter V of chapter 11 of the Bankruptcy Code. According to court filings, Coronet Ceramics Inc. estimates between $1 million and $10 million in debt owed`to 1 to 49 creditors. The petition states that funds will be available to unsecured creditors. The Debtor requested a two-week extension, until May 10, 2023, of the deadline to file its schedules and other required documents. The Debtor's proposed deadline would be eight days prior to the first 11 U.S.C. Sec. 341 meeting of creditors currently scheduled for May 18th, 2023; thus the proposed date would still provide adequate time for creditors and other parties in interest to review the schedules and statements prior to the Sec. 341 meeting. About Coronet Ceramics Coronet Ceramics Inc. is a ceramic manufacturing company. Coronet Ceramics Inc. filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No. 23-11425) on April 12, 2023. In the petition filed by Timothy Wetzel, as CTO, the Debtor reported assets up to $50,000 and liabilities between $1 million and $10 million. The Subchapter V trustee: Jeanette E. McPherson One Summerlin 1980 Festival Plaza Drive, Suite 700 Las Vegas, Nevada 89135 The Debtor is represented by: Seth D.Balstaedt, Esq. BALLSTAEDT LAW FIRM, LLC DBA FAIR FEE LEGAL SERVICES 2510 E SUNSET RD STE 6-184 LAS VEGAS, NV 89120 Tel: (702) 715-0000 Fax: (702) 666-8215 Email: help@bkvegas.com COVENANT SOLAR: Hits Chapter 11 Bankruptcy Protection ----------------------------------------------------- Covenant Solar Tech LLC and Covenant Roofing and Construction Inc. filed for chapter 11 protection in the Eastern District of North Carolina. Covenant Roofing was founded in December 2013 by Julian C. Hall II. Hall started the company to help homeowners recover from storm damage by restoring properties to a pre-loss condition, while working with insurance companies. Most projects include some combination of roofing, siding, gutters, and windows. Hall grew the company from one location to five locations across three states (North Carolina, Kentucky, and Virginia) by 2020. In 2020, Hall acquired a small solar company, which was rebranded as Covenant Solar. In 2021 the sales team was rebuilt, and Covenant Solar expanded into two new locations. The Debtors rebranded under the tradename "Covenant Solar and Roofing" and have a joint website located at https://covenantsolar.com/ Collectively, Debtors are under contract to perform over 250 residential roofing and solar projects over the coming months, which is set to generate over $6 million of revenue for the two companies. The goal of Debtors' Chapter 11 filings is to preserve the value of and restructure Debtors' debts, so that Debtors may pay, over time, as much as practicable to its secured and unsecured creditors. The Debtors believe that reorganization is a vastly superior alternative to liquidation, and that in a liquidation, unsecured creditors would receive little, if any, return. As of the Petition Date, Debtors had cash of approximately $188,912.82 and the Debtors’ accounts receivable total approximately $2,079,034.02. About Covenant Solar Tech Covenant Solar Tech LLC and Covenant Roofing and Construction Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D.N.C. Case No. 23-00998-5-JNC) on April 11, 2023. In the petitions signed by Julian C. Hall II, authorized person, the Debtors disclosed up to $10 million in both assets and liabilities. The petitions state that funds will be available to unsecured creditors. L. Katie Green, Esq., at Michael Best & Friedrich LLP, is the Debtors' legal counsel. COVENANT SOLAR: Taps Michael Best & Friedrich as Legal Counsel -------------------------------------------------------------- Covenant Solar Tech, LLC and Covenant Roofing and Construction, Inc. seek approval from the U.S. Bankruptcy Court for the Eastern District of North Carolina to employ Michael Best & Friedrich, LLP as bankruptcy counsel. The Debtors require legal counsel to: a. advise and assist the Debtors with respect to their rights, duties and powers under the Bankruptcy Code; b. advise the Debtors on the conduct of their jointly administered Chapter 11, Subchapter V cases, including the legal and administrative requirements of operating in Chapter 11; c. attend meetings and negotiate with representatives of creditors and other parties in interest; d. prosecute actions on behalf of the Debtors, defend actions commenced against the Debtors, and represent the Debtors' interests in negotiations concerning litigation in which the Debtors are involved, including objections to claims filed against Debtors' estate; e. prepare pleadings in connection with these Chapter 11 cases, including motions, applications, answers, orders, reports, and papers necessary or otherwise beneficial to the administration of Debtors' estate; f. advise the Debtors in connection with and assist in the negotiation and documentation of financing arrangements and related transactions, contracts, commercial transactions, and any potential sale of assets; g. assist the Debtors on licensing, regulatory, tax and other governmental matters; h. appear before this court to represent the interests of the Debtors' estate; i. assist the Debtors in preparing, negotiating, and implementing a plan, and advising Debtors with respect to any rejection of a plan and reformulation of a plan, if necessary; and j. perform all other necessary or appropriate legal services for the Debtors in connection with the prosecution of these Chapter 11 cases, including (i) analyzing the Debtors' leases and contracts and assumption and assignment or rejection thereof, (ii) analyzing the validity of liens against the Debtors, and (iii) advising the Debtors on other transactional and litigation matters. The firm will be paid at these rates: Justin M. Mertz, Partner $595 per hour Christopher J. Schreiber, Partner $550 per hour Other Partners $350 to $750 per hour Laura K. Greene, Senior Counsel $420 per hour Mason A. Higgins, Associate $340 per hour Other Associates and Staff Attorneys $215 to $500 per hour Paralegals and Other Paraprofessionals $100 to $300 per hour The firm received from the Debtors a retainer of $50,000. In addition, the firm will receive reimbursement for out-of-pocket expenses incurred. Justin Mertz, Esq., a partner at Michael Best & Friedrich, 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: Justin M. Mertz, Esq. Michael Best & Friedrich LLP 100 E. Wisconsin Avenue, Suite 3300 Milwaukee, WI 53202-4108 Tel: (414) 271-6560 Email: jmmertz@michaelbest.com About Covenant Solar Tech Covenant Solar Tech, LLC and Covenant Roofing and Construction, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. N.C. Case Nos. 23-00998 and 23-00999) on April 11, 2023. At the time of the filing, the Debtors disclosed $1 million to $10 million in both assets and liabilities. Justin M. Mertz, Esq., at Michael Best & Friedrich, LLP represents the Debtor as legal counsel. CRAFTSMAN ROOFING: Court OKs Cash Collateral Access Thru May 3 -------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of North Carolina, Raleigh Division, authorized Craftsman Roofing Services, Inc. to use cash collateral on an interim basis in accordance with the budget, with a 10% variance, through May 3, 2023. The Bancorp Bank and Fora Financial Business Loans may have an interest in the cash collateral. As adequate protection, the Secured Creditors are granted a valid and perfected replacement liens in and upon all of the categories and types of collateral in which they held a security interest and lien as of the Petition Date to the same extent, validity and priority that they held as of the Petition Date. The Secured Creditors' liens upon the post-petition collateral will be deemed immediately perfected without the need for any further action on the part of the Secured Creditors. As additional adequate protection to the Secured Creditors, the Debtors will provide Bancorp, the Subchapter V Trustee and the Bankruptcy Administrator with a budget-to-actual comparison report by close of business on the day prior to any return hearing date on the motion. On or before May 3, 2023, the Debtors will pay $17,274 to Bancorp as adequate protection to Bancorp. These events constitute an "Event of Default": (i) The Debtor fails to comply with any of the terms or conditions of the Order; (ii) The Debtor uses cash collateral other than as agreed in the Order; (iii) Appointment of a trustee or examiner in the proceeding; (iv) Cancellation or lapse of the Debtor's insurance coverage; (v) Cessation of business operations by the Debtor; or (vi) Conversion to chapter 7 or dismissal of the case. A continued hearing on the matter is set for May 3 at 2 p.m. A copy of the court's order and the Debtor's budget is available at https://bit.ly/3V8Iv1A from PacerMonitor.com. The Debtor projects $299,500 in total revenues and $166,373 in total expenses. About Craftsman Roofing Services, Inc. Craftsman Roofing Services, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D.N.C. Case No. 23-01013) on April 13, 2023. In the petition signed by Russell Vandiver, president, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Pamela W. McAfee oversees the case. Philip M. Sasser, Esq., at Sasser Law Firm, serves as counsel to the Debtor. CROWN FINANCE: $650M Bank Debt Trades at 82% Discount ----------------------------------------------------- Participations in a syndicated loan under which Crown Finance US Inc is a borrower were trading in the secondary market around 18.1 cents-on-the-dollar during the week ended Friday, April 28, 2023, according to Bloomberg's Evaluated Pricing service data. The $650 million facility is a Term loan that is scheduled to mature on September 20, 2026. The amount is fully drawn and outstanding. Crown Finance US, Inc. operates as a movie theater. CYXTERA TECHNOLOGIES: Plans Sale, Capital Raise to Address Debt --------------------------------------------------------------- Reshmi Basu of Bloomberg News reports that Cyxtera Technologies Inc. is exploring options including a potential sale and a possible capital raise as it continues discussions with lenders on how to address debt due in 2024, according to people with knowledge of the matter. Potential suitors for the data-center firm include private equity funds, who have already signed nondisclosure agreements to look at the business, said the people, who asked not to be identified because the matter is private. The latest moves by the company come as it looks to avoid a bankruptcy filing, the people said. About Cyxtera Technologies Headquartered in Coral Gables, FL, Cyxtera Technologies, Inc. -- https://www.cyxtera.com -- is a global data center company providing retail colocation and interconnection services. The Company provides an innovative suite of deeply connected and intelligently automated infrastructure and interconnection solutions to more than 2,300 leading enterprises, service providers and government agencies around the world - enabling them to scale faster, meet rising consumer expectations and gain a competitive edge. Cyxtera reported a net loss of $355.1 million for the year ended Dec. 31, 2022, compared to a net loss of $257.9 million for the year ended Dec. 31, 2021. * * * As reported by the TCR on Dec. 23, 2022, S&P Global Ratings lowered its issuer credit rating on U.S.-based data center operator Cyxtera Technologies Inc. by two notches to 'CCC' from 'B-'. The negative outlook reflects Cyxtera's diminishing liquidity position and the potential for a default or debt restructuring over the next 12 months. DAVID'S BRIDAL: Owes Vendors $27.5M as It Navigates Chapter 11 -------------------------------------------------------------- Ben Unglesbee of Supply Chain Dive reports that David's Bridal has secured court approval to pay up to $8.9 million owed to its trade creditors after filing for Chapter 11. The company owes about $27.5 million in all on its accounts to trade creditors, including critical vendors. That includes $5.5 million owed to Fillberg Limited, a venture co-owned by the retailer that sources most of its merchandise. For any retailer in bankruptcy -- whether they intend to reorganize, sell themselves or even wind down in orderly fashion -- keeping operations running smoothly through the process is critical. For bridal retailers, maintaining their supply chains in bankruptcy is arguably even more crucial. Take the case of Alfred Angelo, a wedding retailer that shut down abruptly nearly six years ago. Customers that had already put down deposits were left panicked, wondering if they would get their dresses or their deposits back. Scores of customers turned into bankruptcy claimants. The company's liquidation haunted David's Bridal amid its first filing for bankruptcy in late 2018. James Marcum, current CEO of David's Bridal, noted in a filing this week that the previous bankruptcy came during what's known in the industry as "Bridal Christmas." This is when customers pick their dresses and pay their deposits for dresses that may be on hand or in a distribution center, or may still need to be manufactured or are in transit. "Unfortunately, the timing of the Prior Chapter 11 Cases during the 2019 Bridal Christmas season impacted the customer's perception of the Company's brand and resulted in a decline in confidence in the Company during what should have been a peak sale period," Marcum said. According to the executive, that helped set the stage for David’s Bridal's second bankruptcy. Today the company is heavily reliant on the Fillberg joint venture, which is the exclusive purchasing agent for David's Bridal outside of North America, to source its merchandise. That makes the Hong Kong-based Fillberg key to the retailer’s health in the coming weeks and months. Fillberg sources more than 87% of David's Bridal's merchandise and acts as a conduit between the retailer and some 30 fabric mills and factories in China, Sri Lanka and other areas. Last 2022, the entity supplied around $120 million in merchandise for David's Bridal, according to a filing. Fillberg sells the goods to the retailer without markup, taking instead a commission payment from the company. And David's Bridal currently owes the entity several million dollars, which the retailer said Fillberg needs to pay its own suppliers. David's Bridal needs those suppliers to keep merchandise flowing to its customers. "Implicit in the Debtors' businesses is their reliance on services provided by the Critical Vendors," the company said in its request to pay suppliers. It went on to note that it had narrowed down a list of 600 total vendors to a smaller group that represent 26% of its accounts payable as of its Chapter 11 filing, and who the retailer needs to pay $6.9 million in the coming days to keep its business running smoothly. To pay those vendors and other bills, David's Bridal secured court approval this week for a bankruptcy financing package with an $85 million credit facility. While in bankruptcy, the retailer is looking to sell itself during the process, Marcum said. If no acquirer emerges, David's Bridal plans to liquidate. About David's Bridal David's Bridal, based in Conshohocken, Pa., and its affiliated entities are international bridal and special occasion retailers. They sell a broad assortment of bridal gowns, bridesmaid dresses, special occasion dresses and accessories. Then with over 300 stores, David's Bridal, Inc., and its three affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 18-12635) on Nov. 19, 2018. The Hon. Laurie Selber Silverstein was the case judge. Debevoise & Plimpton LLP served as the Company's legal advisor, Evercore LLC was the financial advisor and AlixPartners LLP was the restructuring advisor. In January 2019, David's Bridal successfully emerged from Chapter 11 bankruptcy and completed its financial restructuring. 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, listing $100 million to $500 million in both estimated assets and estimated liabilities. The Hon. Christine M. Gravelle presides over the Debtors' new Chapter 11 cases. Joshua A. Sussberg, P.C., Christopher T. Greco, P.C., Rachael M. Bentley, Esq., and Alexandra Schwarzman, P.C., at Kirkland & Ellis LLP; and Michael D. Sirota, Esq., Felice R. Yudkin, Esq., and Rebecca W. Hollander, Esq., at Cole Schotz P.C., serve as counsel to the Debtors in the new Chapter 11 cases. The Debtors' financial advisor is Berkeley Research Group, LLC; investment banker is Houlihan Lokey Capital, Inc.; liquidation consultant is Gordon Brothers Retail Partners, LLC; and claims and noticing agent is Omni Agent Solutions. DAWN ACQUISITIONS: $550M Bank Debt Trades at 55% Discount --------------------------------------------------------- Participations in a syndicated loan under which Dawn Acquisitions LLC is a borrower were trading in the secondary market around 44.9 cents-on-the-dollar during the week ended Friday, April 28, 2023, according to Bloomberg's Evaluated Pricing service data. The $550 million facility is a Term loan that is scheduled to mature on December 31, 2025. The amount is fully drawn and outstanding. Dawn Acquisitions LLC, doing business as Evoque Data Center Solutions, provides digital infrastructure and data center solutions. The Company offers multi-generational infrastructure, colocation, connectivity, build-to-suit, and cloud engineering solutions. DCL HOLDINGS: Taps Anthony Saccullo as Wind-Down Officer -------------------------------------------------------- DCL Holdings (USA), Inc. and its affiliates seek approval from the U.S. Bankruptcy Court for the District of Delaware to employ Saccullo Business Consulting, LLC and designate Anthony Saccullo, a member of the firm, as wind-down officer. Saccullo's services include: (a) taking actions as the firm reasonably deems appropriate to minimize administrative expenses of the Debtors' estates; (b) overseeing the disposition of the Chapter 11 cases; (c) overseeing the professionals retained by the Debtors; (d) authorizing and causing the payment of the Debtors' final bills only from funds of the estates; (e) establishing and administering any accounts required to be established pursuant to the asset purchase agreement with Pigments Services, Inc.; (f) causing the Debtors to comply with all other post-closing obligations of the Debtors under the APA; (g) acting on behalf of the Debtors with respect to any transitional services agreement between the Debtors and the purchaser under the APA; (h) supervising the Debtors' professionals and advisors in connection with the preparation and filing of tax returns for the Debtors, as well as Form 5500s and related audits for the Debtors' employee benefit plans (as needed); (i) overseeing the preparation and filing of any necessary state regulatory filings, monthly operating reports and other reporting required by the court or the U.S. Trustee; (j) cooperating on transition issues; (k) appearing before the court as representative of the Debtors on an as-needed basis; (l) overseeing and causing the disposition of the Debtors' records in compliance with applicable law; and (m) all other administrative matters incident to the wind-down of the Debtors' business affairs and bankruptcy estates. Saccullo will charge a monthly fee of $20,000 for the services rendered by the wind-down officer and hourly fees ranging from $165 to $550 for additional personnel to be provided by the firm. Mr. Saccullo 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: Anthony M. Saccullo Saccullo Business Consulting, LLC 27 Crimson King Drive Bear, DE 19701 Tel: (302) 832-5595 Fax: (302) 836-8787 Email: ams@saccullolegal.com About DCL Holdings DCL Holdings (USA) Inc. -- https://www.pigments.com/ -- offers the broadest range of color pigments and preparations for the coatings, plastics and ink industries worldwide. The company is a global leader in the supply of color pigments and dispersions for the coatings, plastics and ink industries, according to its Web site. DCL Holdings (USA) and five affiliates sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 22-11319) on Dec. 20, 2022. In the petition filed by its chief restructuring officer, Scott Davido, the Debtor reported between $100 million and $500 million in both assets and liabilities. The Debtors tapped King & Spalding, LLP as bankruptcy counsel; Richards, Layton & Finger, P.A. as Delaware counsel; TM Capital Corp. as investment banker; and Ankura Consulting Group, LLC as restructuring advisor. Kroll Restructuring Administration, LLC is the claims and noticing agent. The U.S. Trustee for Region 3 appointed an official committee of unsecured creditors on Dec. 30, 2022. Quinn Emanuel Urquhart & Sullivan, LLP, Morris James, LLP and Province, LLC serve as the committee's bankruptcy counsel, Delaware counsel and financial advisor, respectively. DESERT VALLEY: Taps Sacks Tierney as Substitute Counsel ------------------------------------------------------- Desert Valley Steam Carpet Cleaning, LLC received approval from the U.S. Bankruptcy Court for the District of Arizona to employ Sacks Tierney P.A. to substitute for the Law Offices of Mark J. Giunta. Sacks Tierney will assist the Debtor in all matters associated with its Chapter 11 case; represent the Debtor in court hearings; and negotiate and resolve all issues related to the case. The firm will be paid at these rates: Partners $385 to $600 per hour Associates $275 to $375 per hour Paralegals $205 to $230 per hour In addition, the firm will receive reimbursement for out-of-pocket expenses incurred. Randy Nussbaum, Esq., a partner at Sacks Tierney, 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: Randy Nussbaum, Esq. Sacks Tierney P.A. 4250 N. Drinkwater Blvd., 4th Floor Scottsdale, AZ 85251-3693 Tel: (480) 425-2600 Fax: (480) 970-4610 Email: nussbaum@sackstierney.com About Desert Valley Steam Carpet Cleaning Desert Valley Steam Carpet Cleaning, LLC was formed on Aug. 12, 2005, for the purpose of owning and operating a multi-family housing property located at 603 and 607 North D. St., Eloy, Ariz. Desert Valley Steam Carpet Cleaning sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz. Case No. 20-00570) on Jan. 16, 2020. Judge Brenda K. Martin oversees the case. Randy Nussbaum, Esq., at Sacks Tierney P.A. serves as the Debtor's legal counsel. DFW GRANITE: Has Cash Collateral Access on Final Basis ------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Texas, Dallas Division, authorized DFW Granite & Glass Installation, L.L.C. to use cash collateral on a final basis in accordance with the budget, with a 10% variance. The Debtor is authorized to use cash collateral until the effective date of a confirmed plan of reorganization, conversion of the case to a case under Chapter 7 of the Bankruptcy Code, dispossession of the Debtor as a debtor-in-possession, or dismissal of the case. As adequate protection for the use of Cash Collateral, JP Morgan Chase Bank, Seacoast National Bank, and the U.S. Small Business Administration are granted replacement liens on all post-petition cash collateral and post-petition acquired property to the same extent and priority they possessed a valid, perfected and enforceable security interest as of the Petition Date to the extent necessary to protect them from the diminution in value of their collateral on account of the Debtor's use of Cash Collateral. A copy of the order is available at https://bit.ly/3n4Ydya from PacerMonitor.com. About DFW Granite & Glass Installation DFW Granite & Glass Installation sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Tex. Case No. 23-30604) on March 31, 2023. In the petition signed by Michael Thompson, owner, the Debtor disclosed up to $500,000 in assets and up to $10 million in liabilities. Robert C. Lane, Esq., at The Lane Law Firm, represents the Debtor as legal counsel. DIEBOLD NIXDORF: Further Extends Notes Exchange Offer Until May 5 ----------------------------------------------------------------- Diebold Nixdorf, Incorporated announced it has further extended its public exchange offer with respect to the Company's outstanding 8.50% Senior Notes due 2024 (144A CUSIP: 253651AA1; REG S CUSIP: U25316AA5; Registered CUSIP: 253651AC7). Under the Exchange Offer, the Company is offering to exchange any and all of the 2024 Senior Notes for units consisting of (i) new 8.50%/12.50% Senior Secured PIK Toggle Notes due 2026 to be issued by the Company and (ii) warrants to purchase common shares, par value $1.25 per share, of the Company. The Exchange Offer, which was previously scheduled to expire at 5:00 p.m., New York City time, on April 21, 2023, has been extended until 5:00 p.m., New York City time, on May 5, 2023, unless earlier terminated or extended by the Company (such time and date, as it may be further extended. Any 2024 Senior Notes tendered may be withdrawn at any time prior to the Expiration Time, but not thereafter. Except for the extension of the Expiration Time and Withdrawal Deadline, all other terms of the Exchange Offer remain unchanged. As of 5:00 p.m., New York City time, on April 21, 2023, which was the previous expiration time for the Exchange Offer, the aggregate principal amount of the 2024 Senior Notes validly tendered and not validly withdrawn, as advised by D.F. King & Co., Inc., the Information and Exchange Agent for the Exchange Offer, was as set forth below: Title of Notes to be Tendered: 8.50% Senior Notes due 2024 CUSIP Number: 144A CUSIP: 253651AA1; REG S CUSIP: U25316AA5; Registered CUSIP: 253651AC7 Outstanding Principal Amount: $72,112,000 Principal Amount Tendered: $9,086,000 Approximate Percentage of Notes Tendered: 12.60% The terms and conditions of the Exchange Offer are described in the preliminary prospectus, dated March 27, 2023. The completion of the Exchange Offer is subject to the conditions described in the Exchange Offer documents, which include, among others, the effectiveness of the Registration Statement. The Exchange Offer is not conditioned upon any minimum amount of 2024 Senior Notes being tendered. Subject to applicable law, the Company may waive certain other conditions applicable to the Exchange Offer or extend, terminate or otherwise amend the Exchange Offer in its sole discretion. A registration statement on Form S-4, as amended by Amendment No.1 to the Original Registration Statement, relating to the New Securities to be issued in the Exchange Offer, has been filed with the Securities and Exchange Commission but has not yet become effective. The New Securities being offered in the Exchange Offer may not be sold nor may offers to exchange be accepted prior to the time that the Registration Statement related to the Exchange Offer becomes effective. If and when issued, the New Securities will be registered under the Securities Act of 1933, as amended. Holders with questions regarding the terms and conditions of the Exchange Offer may contact J.P. Morgan Securities LLC, the sole Dealer Manager for the Exchange Offer, at (866) 834-4666 (toll-free) or (212) 834-4087 (collect). Requests for copies of the prospectus and related materials may be directed to J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, Attn: Prospectus Department, 1155 Long Island Avenue, Edgewood, NY 11717, or by telephone: 1-866-803-9204 or D.F. King & Co., Inc. at (866) 388-7535 (U.S. toll free), +1(212) 269-5550 (collect), or diebold@dfking.com (email). You may also contact your broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Exchange Offer. Holders are advised to check with any bank, securities broker or other intermediary through which they hold the 2024 Senior Notes as to when such intermediary would need to receive instructions from such Holder in order for that Holder to be able to participate in, or withdraw their instruction to participate in, the Exchange Offer, before the deadlines specified herein and in the Registration Statement. The deadlines set by any such intermediary and The Depositary Trust Company for the submission and withdrawal of tender instructions will also be earlier than the relevant deadlines specified herein and in the Registration Statement. About Diebold Nixdorf Diebold Nixdorf, Incorporated -- http://www.DieboldNixdorf.com/-- automates, digitizes and transforms the way people bank and shop. As a partner to the majority of the world's top 100 financial institutions and top 25 global retailers, the Company's integrated solutions connect digital and physical channels conveniently, securely and efficiently for millions of consumers each day. The Company has a presence in more than 100 countries with approximately 21,000 employees worldwide. Diebold Nixdorf reported a net loss of $585.6 million for the year ended Dec. 31, 2022, a net loss of $78.1 million for the year ended Dec. 31, 2021, a net loss of $267.8 million for the year ended Dec. 31, 2020, and a net loss of $344.6 million for the year ended Dec. 31, 2019. As of Dec. 31, 2022, the Company had $3.06 billion in total assets, $1.60 billion in total current liabilities, $2.58 billion in long-term debt, $245.4 million in long-term liabilities, and a total deficit of $1.37 billion. * * * As reported by the TCR on March 24, 2023, S&P Global Ratings lowered its issuer credit rating on Diebold Nixdorf Inc. to 'CCC' from 'CCC+' and placed all of the ratings on CreditWatch with negative implications. S&P said the negative CreditWatch reflects the uncertainty around the company's ability to address its upcoming debt maturities in 2024, the sustainability of its capital structure over the longer term, and its belief that a debt restructuring is likely. DISH NETWORK: S&P Lowers ICR to 'CCC+' on Cash Flow Uncertainty --------------------------------------------------------------- S&P Global Ratings lowered all ratings one notch, including the issuer credit rating of U.S.-based Dish Network Corp. and Dish DBS Corp. to 'CCC+' from 'B-'. The negative outlook reflects DISH's limited flexibility to scale back on investments; its large FOCF deficits; execution risk; uncertain macroeconomic conditions; uncertainty of its long-term wireless earnings growth; and significant refinancing requirements, which will be exacerbated by elevated interest rates. S&P said, "We believe Dish is vulnerable to worsening financing conditions and depends on favorable business, financial, and economic conditions to meet its financial commitments long term. Dish has limited financial flexibility to pull back on investments in the current macroeconomic environment given rapidly approaching wireless network buildout requirements. Therefore, the company will need to raise a substantial amount of capital in the coming years to fund capital spending, wireless startup costs, and debt maturities." More specifically, S&P projects the following funding requirements: -- 2024: $4 billion-$5 billion; -- 2025: $2 billion-$3 billion; and -- 2026: $7 billion-$8 billion. Borrowers in North America face a stretch of difficult financing conditions as banking-sector turmoil exacerbates credit strains and the U.S. looks set to slip into a shallow recession. Therefore, Dish may find financing options more costly when it needs to access capital later this year or in early 2024. Specifically, the company must refinance the following low-coupon maturities in the coming years: -- $1 billion 2.375% convertible unsecured notes due March 2024; -- $2 billion 5.875% unsecured notes due November 2024; -- $2 billion 0% convertible unsecured notes due December 2025; -- $2 billion 7.75% unsecured notes due 2026; -- $3 billion 3.375% convertible unsecured notes due 2026; and -- $2.75 billion 5.25% secured notes due 2026. S&P said, "We believe that the company's unencumbered spectrum assets (currently totaling about $15 billion in book value) provide options to raise capital. However, market appetite for incremental debt may be significantly more limited than the book value of spectrum given that investors have required overcollateralization in recent spectrum-back transactions, including a 35% loan-to-value (LTV) covenant. Furthermore, secured notes will likely be expensive, as overcollateralized spectrum-backed debt issued over the past six months pay an 11.75% coupon. "We believe that the company could also issue equity to fund a portion of upcoming maturities--which management has indicated as likely for the $1 billion 2024 converts--although the stock price is currently depressed, which could limit this option. "Ultimately, we believe Dish's ability to successfully refinance its maturity wall in 2026 will depend on its ability to demonstrate that its wireless business can be profitable at scale, which remains highly uncertain. "We are uncertain whether or when Dish can generate sustainably positive FOCF. We project that Dish will run a FOCF deficit of $1.5 billion-$2 billion per year in 2023 and 2024 as the company spends heavily to deploy its wireless network. Beyond that, it is unclear when--and if--Dish can begin to generate positive FOCF because it remains highly uncertain how quickly Dish can add customers, how large the addressable market will be for the nascent 5G enterprise/wholesale market, the margins its new wireless network can produce, and how costly the network ultimately will be to build. It is also unclear what Dish's future interest expense will be but based on current yields (that range from 13% for secured notes up to more than 25% for unsecured notes), Dish would not likely generate positive cash flow at these rates, which could make refinancing difficult longer term." Dish's Boost retail wireless segment will likely burn cash over the next year as marketing and distribution costs accelerate to launch its Boost Infinite postpaid service expected in late 2023, which could also require handset subsidies. Furthermore, Boost's prepaid wireless business is shrinking rapidly, with service revenue down 12% in 2022, as subscribers declined about 6.5% and average revenue per user (ARPU) fell more than 3%, and fourth-quarter retail wireless EBITDA of negative $68 million. We believe Boost Infinite will struggle to gain market share in 2024 given mature wireless market conditions and competition from larger, more established wireless players with already strong brands, which leaves little room for a new entrant with limited brand recognition. S&P believes Dish will need to compete on price, but cable players have been successful in penetrating the more price-sensitive segment of the market recently by aggressively bundling mobile service with high-speed internet, which could be difficult for Dish to compete against. The bigger wireless opportunity lies with the nascent 5G enterprise, internet of things (IoT), and wholesale market, in which Dish has targeted a 25% market share that management indicated in May 2022 could be a $30 billion overall domestic market by 2025. However, the company lacks meaningful contracts with large enterprise clients and has not secured a long-anticipated strategic partner that could improve line of sight into future revenue growth. Furthermore, the adoption of 5G private networks has been slow to gain traction across the industry, and potential enterprise customers could pause decision-making around deploying new communications architecture in a recessionary environment, which could limit awards over the next year. Therefore, S&P reduced its projections for 5G enterprise revenue significantly to reflect this lack of clarity. Adding to the uncertainty is the recent departure of Dish's chief commercial officer of wireless, Stephen Bye, who left the company in January 2023 (but was appointed to Dish's board of directors). The recent cyber attack furthers cash flow uncertainty. Dish was the subject of a network outage that began on Feb. 23, 2023, that affected its internal servers and information technology (IT) systems. The outage was part of a ransomware attack, with extracted data that could have included personal information. While its core pay-TV and wireless services remain operational, the attack impaired its customer call centers and internet sites. Dish has retained the services of cyber security experts and outside advisors to contain, assess, and remediate the situation, and the forensic investigation and assessment of the incident remains ongoing. S&P expects the cyber attack will hurt Dish's customer metrics in the first half of 2023, with limited gross additions as online sales channels were down for several weeks, and potentially increased customer churn. Furthermore, it is unclear what the cost of remediation will be and whether there will be legal expenses associated with the attack, as Dish is facing numerous investor class-action lawsuits over the breach. For context, T-Mobile agreed to pay $500 million in fines and technology investments following a customer data breach in 2021. Furthermore, this could potentially complicate Dish's ability to persuade enterprise customers to rely on its network longer term. Dish's 800 megahertz (MHz) call option has increased in value. The company has an option to purchase 13.5 MHz of T-Mobile's nationwide 800 MHz spectrum licenses for $3.6 billion in the coming months. The fair value of this derivative option increased about $1 billion in the recently filed 10-K to $1.7 billion. The higher value was due to an increase in the probability of exercising this option and market data that indicated higher pricing for similar assets. Dish started testing this frequency in March in Arizona, which could signal its interest in purchasing the spectrum. However, given elevated financial leverage, S&P believes the purchase requires a financing partner. Alternatively, Dish could sell this option or execute on another party's behalf, which could serve as a funding vehicle and help ease some capital requirements in 2024. However, we view this as a lower probability given limited strategic buyers. The potential advanced wireless services (AWS)-3 reauction could require additional funding. Dish filed a petition to rehear a case that was denied in August 2022, paving the way for a reauction of the 25% small business discount that Dish received for AWS-3 spectrum in 2015. However, the timing of reauction is unclear and Dish plans to vigorously defend the case. If a reauction occurs, Dish will be responsible for the difference between the winning bid and $2.8 billion ($3.3 billion originally bid minus $500 million in fines Dish already paid). Effectively, this places a floor of $2.8 billion on Dish's capital requirement if it wins the reauction and incentivizes the company to participate if competing bids are low. However, if another bidder wins the licenses and spends more than $2.8 billion, Dish will not owe any money. The issuer credit rating (ICR) on Dish impairs that of its subsidiary, Dish DBS. The stand-alone credit metrics at pay-TV subsidiary Dish DBS are healthier, with S&P Global Ratings-adjusted debt to EBITDA of 5.3x and FOCF to debt of about 11% in 2022. However, we cap the Dish DBS ICR at the parent level because of the potential for Dish to extract cash from Dish DBS in times of stress. Historically, Dish has used Dish DBS's cash flow to fund the purchase of wireless assets. More recently, its other long-term obligations increased to $5 billion on Dish DBS's balance sheet as of Dec. 31, 2022 (from less than $500 million two years earlier), due in part to obligations incurred on behalf of Dish's wireless segment, which we include in adjusted debt. S&P projects that Dish DBS can generate sufficient cash flow to offset declining earnings such that it maintains leverage of 4x-5x for the next several years, assuming that no cash goes to the parent and Dish DBS pays down debt using internal cash flow. However, Dish DBS is the primary cash generating asset of Dish, rendering this assumption uncertain. The negative outlook reflects DISH's limited financial flexibility to scale back on investments, its large FOCF deficits, execution risk, uncertainty of its long-term wireless earnings growth, and significant refinancing requirements, which will be exacerbated by elevated interest rates. S&P said, "We could lower the rating if the company's liquidity position tightens such that we view a default or distressed exchange as likely over the next 12 months. "We could revise the outlook to stable if the company improves its liquidity position such that there are no longer material cash flow shortfalls over the next 12 months. "We could raise the rating if the company demonstrates a path to positive long-term FOCF generation, which could be caused by profitable market share gains in its wireless segment. This would likely involve public disclosure of network partners and enterprise contracts that would give us greater confidence that the company's wireless strategy can generate significant revenues and cash flows." 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 Dish. Controlling shareholder Charlie Ergen could place personal interests ahead of creditors. Mr. Ergen has a vision for a nationwide wireless network that will cost at least $10 billion to build, and he has historically structured deals to provide maximum flexibility. This could raise credit risk over time, depending on financing sources and structure, partnerships, and the company's ability to gain traction in the competitive wireless market." DIV005 LLC: Endurance Assurance Says Plan Not Filed in Good Faith ----------------------------------------------------------------- Endurance Assurance Corporation objects to the Disclosure Statement for Joint Plan of Reorganization of DIV005 LLC and Metal Benders USA LLC. Of relevance to this Objection, Endurance issued 2 surety bonds relating to payment and performance obligations executed on behalf of DIV005 as principal on 2 projects. Endurance claims that neither the Disclosure Statement nor the Plan reference the Bonds, Indemnity Agreement, the Bond Claims or the resulting Indemnity Claims that Endurance has against the Indemnitors, including DIV005. Additionally, the Disclosure Statement fails to identify the real property which is being sold by Winder Property Partners, LLC, a sister company of DIV005, to satisfy the Class 4 Secured Claim of Truist. Endurance points out that the Disclosure Statement lacks adequate information because while it states Winder will sell certain real property to satisfy Truist's Class 4 Secured Claim, it fails to identify the specific property being sold, the sale price of the property and whether that property is part of any collateral held in favor of Truist. To the extent the property contemplated to be sold is part of the collateral held by Truist, Endurance has a claim to any excess proceeds of the real property sale once Truist's claim is paid. Endurance contends that the Exculpation Provision must be clarified to confirm that the Indemnity Claims Endurance holds against the Indemnitors, including WIP, are not released. To the extent the Exculpation Provisions does attempt to release Endurance's Indemnity Claims against the Indemnitors, Endurance reserves the right to supplement this Objection. Endurance asserts that the terms of the Debtors' Plan are proposed in bad faith. The Plan provides: (1) the cancellation of the membership interests in the Debtors (of which WIP was the managing of DIV005), in exchange for a $25,000 cash infusion by WIP for 100% stock in the Reorganized Debtor named DIV005 LLC; (2) Debtors to be completely discharged from any liabilities except those expressly assumed; and (3) all property comprising the Estate to be revested back into the Debtors free and clear of all liens, claims and encumbrances. Endurance further asserts that the Debtors' Plan is to just give all of its assets to its insider, WIP, free and clear of all liens, claims and encumbrances for a minimal price of $25,000, while only paying Class 5 general unsecured creditors 2.9% of their claims and Class 6 unsecured creditors 25% of their claims (again, these figures fail to take into account Endurance's proof of claim, Bond Claims paid and/or Indemnity Claims). However, even the 25% payment to Class 6 unsecured creditors is misleading because Class 6 contains those creditors with unsecured claims of $10,000 or less (or which voluntarily reduce their Allowed claim to no less than $10,000). Accordingly, the Debtors are basically forcing general unsecured creditors to reduce their Allowed claim to $10,000 in order to get a $2,500 payment 1 year of the Effective Date, or wait 5 years to be paid about 3 cents on the dollar. While at the same time, DIV005's existing insider managing member, WIP, gets to shed almost all of the Debtors' debt and continue to operate free and clear for a minimal cash infusion. A full-text copy of Endurance Assurance's objection dated April 25, 2023 is available at https://bit.ly/41OG7zB from PacerMonitor.com at no charge. Local Counsel for Endurance Assurance: ARNALL GOLDEN GREGORY LLP Darryl S. Laddin, Esq. ( 171 17th Street NW, Suite 2100 Atlanta, Georgia 30363-1031 Telephone: (404) 873-8120 Facsimile: (404) 873-8121 Email: darryl.laddin@agg.com Attorneys for Endurance Assurance: HARRIS BEACH PLLC Lee E. Woodard, Esq. Brian D. Roy, Esq. 333 West Washington Street, Suite 200 Syracuse, New York 13202 Telephone: (315) 423-7100 Facsimile: (315) 422-9331 Email: lwoodard@harrisbeach.com broy@harrisbeach.com About Div005, LLC Div005, LLC, is primarily engaged in manufacturing iron and steel pipe and tube, drawing steel wire, and rolling steel shapes, from purchased steel. Div005, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 22-21202) on Nov. 23, 2022. In the petition signed by Harold Lerner, manager, the Debtor disclosed up to $50,000 in assets and up to $10 million in liabilities. Metal Benders USA LLC filed its voluntary petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 22-21201) on Nov. 23, 2022. The Debtor estimated up to $50,000 in assets and $1 million to $10 million in liabilities. Gary M. Murphey has been appointed as Subchapter V trustee. Cameron M. McCord, Esq., at Jones & Walden, LLC, serves as the Debtors' counsel. DOSHI ASSOCIATES: Amends Non-Insider Unsecured Claims Pay Details ----------------------------------------------------------------- Doshi Associates, Inc., submitted a First Amended Subchapter V Plan of Reorganization dated April 25, 2023. The Debtor tried to negotiate a settlement with Ipanema but was unable to do so. Ipanema commenced litigation and ultimately secured a judgment against the Debtor for over $800,000. The Debtor was left with little choice but to commence these bankruptcy proceedings. Class I shall consist of the Allowed Claims of all Non-Insider Unsecured Creditors. Debtor shall pay its Projected Disposable Income (PDI) to unsecured creditors in 60 consecutive monthly installments as set forth in the Plan Projections, with the first payment coming due on the first day business day of the Commencement Month, or June 1, 2023, whichever is later, and monthly thereafter. All payments shall be distributed to Holders of Allowed Unsecured Claims on a pro-rata basis. The Debtor will provide the Subchapter V Trustee with its income tax returns on or before September 15, for each of the next 5 years following the effective date. Additional Funding for Class I The lone creditor in this class is Ipanema Troy, LLC. It is currently the subject of a preference action which seek the turnover of a preference payment in the amount of $116,547.18. The Debtor proposes paying Ipanema the total sum of $350,000 by 1) dismissing the preference action (Adv. Pro. No. 23-04073) and allowing Ipanema to retain 100% of the preference payment and 2) paying the sum of $233,452.82. in full satisfaction of its Claim. This Class is impaired. Class II consists of all Insider Unsecured Creditors. The class will be subordinated to the Class I Claimant and will receive a 0% distribution. This Class is impaired. Class III consists of the Debtor's equity holders. These Class members will have their equity interest in the Debtor extinguished and will receive no distributions from the Debtor in the form of Cash or any equity interest in the Reorganized Debtor. This Class is impaired. The Debtor has attached summary of post confirmation financial projections for the life of the Plan. A full-text copy of the First Amended Subchapter V Plan dated April 25, 2023 is available at https://bit.ly/3NoUWEK from PacerMonitor.com at no charge. Counsel for Debtor: Stuart A. Gold, Esq. Gold, Lange & Majoros, P.C. 24901 Northwestern Hwy., Suite 444 Southfield, MI 48075 Tel: (248) 350-8220 Email: sgold@glmpc.com About Doshi Associates Doshi Associates is an architectural and engineering company. Doshi Associates, Inc., filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Mich. Case No. 22-49210) on Nov. 22, 2022. The petition was signed by Shailesh Doshi as shareholder. At the time of filing, the Debtor estimated $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. Stuart A. Gold, Esq. at GOLD, LANGE, MAJOROS & SMALARZ, PC, is the Debtor's counsel. EL CASTILLO RETIREMENT: Fitch Affirms 'BB+' IDR, Outlook Stable --------------------------------------------------------------- Fitch Ratings has affirmed El Castillo Retirement Residences, NM's (El Castillo) Issuer Default Rating (IDR) at 'BB+'. Fitch has also affirmed the 'BB+' ratings on the series 2012 and 2019A bonds issued by the City of Santa Fe, NM on behalf of El Castillo. The Rating Outlook is Stable. Entity/Debt Rating Prior ----------- ------ ----- El Castillo Retirement Residences (NM) LT IDR BB+ Affirmed BB+ El Castillo Retirement Residences (NM) /General Revenues/1 LT LT BB+ Affirmed BB+ The 'BB+' rating reflects El Castillo's financial profile characterized by weak leverage and capital-related metrics as a result of a significant debt issuance in 2019 to fund the La Secoya project consisting of a new independent living campus that includes 68 independent living units (ILUs), common areas and 142 underground parking spaces. These weaknesses are offset by El Castillo's strong demand as seen in the high ILU occupancy in its existing ILUs and the achievement of stabilized occupancy at La Secoya that allowed for the full redemption of the community's temporary debt in 2022. Fitch expects strong and stable occupancy in both the existing and new ILUs to lead to improved operating performance and improving liquidity and leverage metrics - these factors support the current rating and Stable Outlook. SECURITY A gross revenue pledge, a mortgage on the community and a debt service reserve fund secure the 2012 and 2019A bonds. KEY RATING DRIVERS Revenue Defensibility - 'a' Strong ILU Demand/Limited Competition Fitch's 'a' revenue defensibility assessment reflects El Castillo's long operating history, favorable location and attractive pricing that has produced consistently strong ILU occupancy. Existing ILUs have averaged 97% occupancy over the last five fiscal years and the new La Secoya ILUs achieved stabilized occupancy in three months - well ahead of the 22-month forecasted move-in schedule from the feasibility study. Fitch believes that El Castillo's ability to maintain high ILU occupancy and sell new units illustrate its sound demand characteristics despite the fact that occupancy in the healthcare service lines have been consistently weak. The risk of low healthcare occupancy is mitigated by the fact that El Castillo's healthcare offerings and staffing levels are structured to primarily support existing residents on campus and the community is not licensed for Medicare or Medicaid. This removes governmental reimbursement risks as well as operational challenges associated with consistently turning over Medicare rehabilitation admissions. El Castillo has consistently implemented fee increases, including a 6.4% increase of ILU, assisted living, memory support and nursing fees and a 3.3% increase of independent living entrance fees in fiscal 2023. Fitch views entrance fees for the community as reasonable given the average entrance fees for both campuses remain below average home values in Santa Fe of approximately $528,000 (entrance fees at El Castillo range from approximately $102,000-$571,000; entrance fees at La Secoya range from approximately $340,000-$585,000). Overall, Fitch expects the demand for El Castillo's services to remain sound given El Castillo's position as the only life plan community in Santa Fe, the limited competition from rental communities and a strong waiting list of approximately 300 people. Operating Risk - 'bb' Weak Core Operating Performance, Leverage and Capital-Related Metrics The 'bb' operating risk assessment reflects El Castillo's weak core operating profitability and very elevated capital related metrics. El Castillo generated an operating ratio and net operating margin of 119% and negative 6.3% in fiscal 2022, which was unfavorable to the preceding four-year average of 109% and 0.5%, respectively. Fitch does not expect El Castillo's depressed fiscal 2022 results to be repeated as the La Secoya campus generated a $621 thousand operating loss due the ramping up of expenses and occupancy that occurred during the fiscal year. La Secoya achieved stabilized occupancy by June 30, 2022, which has led to favorable revenue generation and a $264 thousand operating gain through six-months of fiscal 2023 (ended Dec. 31, 2022). El Castillo generates consistently solid ILU turnover that has resulted in a NOM-adjusted averaging 23% over the past five years, including an adequate 17% NOM-adjusted in fiscal 2022. Given the improvement in core operating profitability to date and solid demand for units across both campuses, Fitch expects El Castillo's NOM-adjusted to return to its historical average in fiscal 2023. El Castillo's average age of plant is sound at 9.9 years as of Dec. 31, 2022 as a result of its robust capital spending over the past few years and the recent opening of La Secoya. Given the completion of the expansion project, capex is expected to moderate significantly with spending expected to average just below depreciation over the next several years, focusing on routine needs and renovation of turned over ILUs. El Castillo's capital related metrics are weak. Based on Fitch's calculations, revenue only maximum annual debt service (MADS) coverage has on average been below 1.0x. Additionally, debt burden is very high with MADS at 36% of fiscal 2022 revenues, though Fitch expects this to moderate in fiscal 2023 with revenues generated by the La Secoya ILUs. Financial Profile - 'bb' Sound Liquidity, Weak Debt Metrics Given El Castillo's 'a' revenue defensibility and 'bb' operating risk and Fitch's forward-looking scenario analysis, Fitch expects key leverage metrics to remain consistent with a 'bb' financial profile assessment through the current economic and business cycle. El Castillo had unrestricted cash and investments of approximately $20.6 million at Dec. 31, 2022, which represented 39.2% of total adjusted debt, when including $5.4 million in its debt service reserve funds. Days cash on hand (DCOH) of 470 days according to the MTI calculation was well above the 180 days covenant. According to management, El Castillo is in compliance with its debt service coverage ratio, which was 2.17x as of Dec. 31, 2022. Fitch's baseline scenario, which is a reasonable forward look of financial performance over the next five years given current economic expectations, shows El Castillo's operating ratio improving over the next few years, but remaining above 100%. Capital spending is expected to be below depreciation over this time. Fitch believes El Castillo's strong demand, sound liquidity and historically steady operating performance provide a cushion to absorb a stressed scenario. The stress scenario assumes an economic stress (to reflect both operating and investment portfolio volatility). The investment portfolio stress is specific to El Castillo's asset allocation. El Castillo's financial profile remains consistent with a 'bb' financial profile as cash-to-adjusted debt improves to approximately 40% by year four. DCOH remains well above 200 days in both the base and stress cases. Asymmetric Additional Risk Considerations No asymmetric risk considerations were relevant to the rating. In November 2022, El Castillo announced that the CEO/Administrator, Allen Jahner, would retire on June 30, 2023 after serving in this position since 1993. In March 2023, El Castillo announced that Carole Peet would join El Castillo as the new Administrator effective May 1, 2023. Ms. Peet most recently served as President/CEO of Yakima Valley Memorial Hospital in Yakima, WA. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - A material decline in unrestricted liquidity; - Indications of weakening ILU demand to levels consistently below 93% or a significant decrease in waitlist households. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - higher rating is possible over the longer-term if cash to adjusted debt is expected to be sustained around 70%; - Material improvement in core operating profitability with an operating ratio below 100% and net operating margin above 3%. PROFILE El Castillo is a nonprofit corporation organized in 1969 that owns and operates two campuses located in Santa Fe, NM. The El Castillo campus consists of 115 ILU apartments, 26 assisted living units, 11 memory support units and 21 skilled nursing beds. The La Secoya campus, which opened in April 2022, consists of 68 ILUs and 143 underground parking spaces. El Castillo only offers a fully amortizing type-A residency agreement. Total operating revenues in fiscal 2022 were $12 million. 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. ELECTRONICS FOR IMAGING: $875M Bank Debt Trades at 25% Discount --------------------------------------------------------------- Participations in a syndicated loan under which Electronics For Imaging Inc is a borrower were trading in the secondary market around 74.6 cents-on-the-dollar during the week ended Friday, April 28, 2023, according to Bloomberg's Evaluated Pricing service data. The $875 million facility is a Term loan that is scheduled to mature on July 23, 2026. About $844.4 million of the loan is withdrawn and outstanding. Electronics for Imaging is a worldwide provider of products, technology and services leading the transformation of analog to digital imaging. EMERALD DEBT: Moody's Assigns First Time 'B1' Corp. Family Rating ----------------------------------------------------------------- Moody's Investors Service assigned first time ratings to Emerald Debt Merger Sub L.L.C. (dba "Copeland"), including a B1 corporate family rating and a B1-PD probability of default rating. Concurrently, Moody's assigned a Ba3 rating to the company's proposed senior secured first lien term loan B. The ratings outlook is stable. Proceeds from the up to $2.75 billion term loan will be used in conjunction with other sources of financing to fund Blackstone's acquisition of an approximately 55% stake in the Climate Technologies business of Emerson Electric Company ("Emerson", A2 stable). The new joint venture between Blackstone and Emerson will be called Copeland. Emerson will receive upfront, pre-tax cash proceeds of approximately $9.5 billion and a note of $2.25 billion at close and retain 45% common equity ownership of Copeland. The total transaction value approximates $14 billion. Assignments: Issuer: Emerald Debt Merger Sub L.L.C. Corporate Family Rating, Assigned B1 Probability of Default Rating, Assigned B1-PD Senior Secured Term Loan B, Assigned Ba3 Outlook Actions: Issuer: Emerald Debt Merger Sub L.L.C. Outlook, Assigned Stable RATINGS RATIONALE The B1 CFR reflects Copeland's high financial leverage as a result of the acquisition of a 55% stake by Blackstone. Pro forma adjusted debt/EBITDA approximates 6.7x as of December 31, 2022, including $2.25 billion of PIK seller note financing. Moody's expects that debt/EBITDA will improve to around 5.5x by the end of 2025. Moody's expects this improvement to emanate from both voluntary debt repayment and EBITDA growth. Moody's anticipates aggressive financial policies that not only reflect the aforementioned high financial leverage, but also the debt structure associated with this transaction. The terms of the bank financing, including restricted payments baskets and incremental leverage that can be incurred, are representative of terms commonly seen across the single-B rating universe. Uncertainty regarding how long Emerson will retain an ownership stake in Copeland is also an important credit consideration. The B1 CFR is supported by the company's strong market position in the global heating, ventilation, air conditioning and refrigeration ("HVACR") compressor market. Moody's also considers the company's strong business profile as well as the 45% ownership stake by Emerson, a highly rated entity. The company benefits from a sizable $5 billion revenue base, strong brand recognition in the compressor end market, a high EBITDA margin that exceeds 20%, geographic diversity and strong cash generation. Strength in the commercial and refrigeration end markets will offset the normalization in the residential market from record levels during the coronavirus pandemic. The company will also benefit from positive sustainability-related secular tailwinds in the HVACR sector. The stable outlook reflects Moody's expectation that the company will use its strong free cash generation to proactively repay debt such that debt/EBITDA improves by 1.5 turns to around 5.5x over the next 18-24 months. Moody's expects that the company will have very good liquidity, supported by strong cash generation that Moody's expects will exceed $300 million in 2023 with further improvement thereafter. Moody's also expects that the company will maintain ample capacity under a $700 million undrawn ABL revolver. Moody's anticipates that the company will have a springing covenant under its ABL facility that is unlikely to be tested. There will be no financial maintenance covenants under the company's term loan B credit agreement. Moody's considers corporate governance to be a key ratings driver. The high financial leverage being used to execute the transaction signals an aggressive financial policy and corporate governance given the partial private equity ownership. That said, Moody's also considers that the combined entity will benefit from Emerson maintaining its 45% ownership stake and participating in the ongoing operations of the joint venture. The Ba3 rating for the term loan B benefits from its seniority position to the company's senior unsecured liabilities and sizable $2.25 billion of PIK seller financing. The bank facility is senior secured by a first-lien pledge of assets. The following are some of the preliminary credit agreement terms, which remain subject to market acceptance. The first lien term loan B credit facility contains provisions for incremental capacity up to the greater of $1.4 billion and 1.00x Consolidated EBITDA, plus unused amounts under the general debt basket, plus amounts subject to the greater of (a) 5.0x First Lien Net Leverage Ratio, and (b) the most recent First Lien Net Leverage Ratio (if pari passu secured to the first lien). Amounts up to the greater of $1.4 billion and 1.00x of Consolidated EBITDA may be incurred with an earlier maturity than the initial term loans. There are no express "blocker" provisions which prohibit the transfer of specified assets to unrestricted subsidiaries; such transfers are permitted subject to carve-out capacity and other conditions. Non-wholly-owned subsidiaries are not required to provide guarantees; dividends or transfers resulting in partial ownership of subsidiary guarantors could jeopardize guarantees, with no explicit protective provisions limiting such guarantee releases. There are no express protective provisions prohibiting an up-tiering transaction. The proposed terms and the final terms of the credit agreement may be materially different. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could cause upward ratings pressure include if the company successfully separates from Emerson without business disruption while maintaining strong operating performance. Meaningful deleveraging, with sustained debt/EBITDA below 4.5x (inclusive of seller financing) could also cause upwards ratings pressure. The realization of cost saving initiatives that translate to higher prospective EBITDA margins would also be considered. Conversely, factors that could pressure ratings downward include if the company experiences challenges separating from Emerson, or if operating performance or cash generation weakens. Ratings could also be pressured downward due to an inability or unwillingness to reduce leverage to below 5.5x (inclusive of seller financing) in the 24-months following the separation transaction. The principal methodology used in these ratings was Manufacturing published in September 2021. Copeland, expected to be based in St. Louis, Missouri, is an entity under Emerald Debt Merger Sub L.L.C., is a joint venture being formed by Blackstone and Emerson with 55% and 45% ownership, respectively. Copeland is the Climate Technologies business of Emerson and a manufacturer of heating, ventilation, air conditioning, and refrigeration ("HVACR") components globally. Products include compressors, comfort control and cold chain related products. Revenue for the fiscal year ended December 31, 2022 approximate $5 billion. EMERALD ELECTRICAL: Taps Brett Wagner as Special Counsel -------------------------------------------------------- Emerald Electrical Consultants, LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of Georgia to employ Brett Wagner, P.C. as special counsel. The Debtor needs the firm's legal assistance in connection with a malpractice case (Case No. 2022-25539) filed in the District Court of Harris County, Texas. The firm will be paid a contingent fee of 35 percent of the amount recovered from the malpractice case. As disclosed in court filings, Brett Wagner is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached at: Brett Wagner Law Office of Brett Wagner, P.C. d/b/a Doherty Wagner 13810 Champion Forest Dr., Suite 225 Houston, TX 77069 Tel: (281) 583-8700 Fax: (281) 583-8701 Email: brett@dwlawyers.com About Emerald Electrical Consultants Emerald Electrical Consultants, LLC specializes in substation construction, related technical services, and consulting across the United States, with a focused presence in the southeastern and central regions of the country. The company is based in Cumming, Ga. Emerald Electrical Consultants sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 22-20913) on Sept. 15, 2022, with $1 million to $10 million in both assets and liabilities. Lindy Truitt, president and chief executive officer of Emerald Electrical Consultants, signed the petition. Judge James R. Sacca oversees the case. The Debtor tapped Benjamin Keck, Esq., at Keck Legal, LLC as bankruptcy counsel; Brett Wagner, P.C. as special counsel; and Hoover Slovacek, LLP as appellate counsel. EMERALD ELECTRICAL: Taps Hoover Slovacek as Appellate Counsel ------------------------------------------------------------- Emerald Electrical Consultants, LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of Georgia to employ Hoover Slovacek, LLP as appellate counsel. The Debtor needs the firm's legal assistance in connection with the appeal filed by defendants in a malpractice case (Case No. 2022-25539) pending before the District Court of Harris County, Texas. The defendants appealed the order issued by a trial court, which denied their motion to dismiss based on the Texas anti-SLAPP law, the Texas Citizen Participation Act. Hoover Slovacek will get 10 percent of the net amount recovered from the malpractice case after Brett Wagner, P.C., the Debtor's special counsel in the malpractice case, is reimbursed for work-related expenses. Dylan Russell, Esq., a partner at Hoover Slovacek, disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Dylan B. Russell, Esq. Hoover Slovacek LLP 5051 Westheimer Rd., Suite 1200 Houston, TX 77056 Tel: (713) 977-8686 Fax: (713) 977-5395 About Emerald Electrical Consultants Emerald Electrical Consultants, LLC specializes in substation construction, related technical services, and consulting across the United States, with a focused presence in the southeastern and central regions of the country. The company is based in Cumming, Ga. Emerald Electrical Consultants sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 22-20913) on Sept. 15, 2022, with $1 million to $10 million in both assets and liabilities. Lindy Truitt, president and chief executive officer of Emerald Electrical Consultants, signed the petition. Judge James R. Sacca oversees the case. The Debtor tapped Benjamin Keck, Esq., at Keck Legal, LLC as bankruptcy counsel; Brett Wagner, P.C. as special counsel; and Hoover Slovacek, LLP as appellate counsel. EPS PARLIN: Case Summary & Five Unsecured Creditors --------------------------------------------------- Debtor: EFS Parlin Holdings, LLC 901 Main Avenue Norwalk CT 06851 Business Description: EFS Parlin is in the business of electric power generation, transmission, and distribution. Chapter 11 Petition Date: April 28, 2023 Court: United States Bankruptcy Court District of Delaware Case No.: 23-10539 Judge: Hon. John T. Dorsey Debtor's Counsel: J. Cory Falgowski, Esq. BURR & FORMAN LLP 222 Delaware Avenue, Suite 1030 Wilmington DE 19801 Tel: 302-830-2312 Email: jfalgowski@burr.com Total Assets as of Feb. 28, 2023: $9,424,029 Total Liabilities as of Feb. 28, 2023: $12,594,508 The petition was signed by Michael Whitworth authorized representative. A full-text copy of the petition containing, among other items, a list of the Debtor's five unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/MT3VJPI/EFS_Parlin_Holdings_LLC__debke-23-10539__0001.0.pdf?mcid=tGE4TAMA FARADAY FUTURE: Expects to Get Additional 180-Day NASDAQ Extension ------------------------------------------------------------------ Faraday Future Intelligent Electric Inc., a California-based global shared intelligent electric mobility ecosystem company, on April 28 disclosed that the Company has received the approval from the NASDAQ Stock Market LLC ("NASDAQ") to list its common stock and warrants on the NASDAQ Capital Market starting from April 25, 2023. Based on guidance from NASDAQ, the Company expects to receive a second 180-day extension (or until October 28, 2023) to meet NASDAQ's $1 minimum bid price requirement for ten consecutive trading days if it continues to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for the NASDAQ Capital Market, with the exception of the minimum bid price requirement. Per NASDAQ's standard procedures, the Company expects to receive official notification of such extension on May 2, 2023. The NASDAQ Capital Market is one of the three listing tiers within the Nasdaq Composite Index. Currently over a third of NASDAQ listed companies are in NASDAQ Capital Market tier. For a company to become part of Nasdaq's Capital Market, it will need to fulfill certain criteria and requirements, including financial and liquidity requirements and corporate governance requirements. As of today, there are many medium ($2Billion-$10Billion market cap) and large cap ($10Billion-$200Billion market cap) companies that trade on the NASDAQ Capital Market. Furthermore, on April 19, 2023, the Company received a written notice from NASDAQ stating that the Company had regained compliance with Nasdaq Listing Rule 5620 which requires the Company to hold an annual meeting of stockholders. FF started the production of its FF 91 Vehicle on March 30, 2023 at its FF ieFactory in Hanford, California and announced the first production vehicle coming off the line on April 14, 2023. The Company also recently announced its three-phase delivery plan for the FF 91 vehicle and continues to work diligently towards the start of delivery of its FF 91 vehicles. About Faraday Future Gardena, CA-based Faraday Future (NASDAQ: FFIE) -- http://www.ff.com-- is a luxury electric vehicle company. The Company has pioneered numerous innovations relating to its products, technology, business model, and user ecosystem since inception in 2014. Faraday Future aims to perpetually improve the way people move by creating a forward-thinking mobility ecosystem that integrates clean energy, AI, the Internet. Faraday Future reported a net loss of $552.07 million for the year ended Dec. 31, 2022, a net loss of $516.50 million for the year ended Dec. 31, 2021, compared to a net loss of $147.08 million for the year ended Dec. 31, 2020. New York, NY-based Mazars USA LLP, the Company's auditor since 2022, issued a "going concern" qualification in its report dated March 9, 2023, citing that the Company has incurred operating losses since inception, has continued cash outflows from operating activities, and has an accumulated deficit. These conditions raise substantial doubt about its ability to continue as a going concern. FJC MANAGEMENT: Unsecureds Will Get 7% to 9% Dividend in Plan ------------------------------------------------------------- FJC Management Inc., filed with the U.S. Bankruptcy Court for the Northern District of California a Plan of Reorganization for Small Business dated April 25, 2023. The Debtor, a Nevada corporation, was formed to operate fast casual restaurants under the "Buffalo Wild Wings" franchise flag. The Debtor is owned by Pravesh Chopra and Ishwinder Judge. Debtor continues to face the results of COVID-19 and its aftermath, with a reduced restaurant count, continuing pressures from the San Ramon landlord and various other creditors, and a wage and hour proceeding in California Superior Court. Accordingly, Debtor submits this plan of reorganization under Chapter 11, subchapter v. Under the terms of the Plan the debtor seeks to restructure its debts and obligations so that, going forward, the Debtor may continue to operate as a going concern for the benefit of all creditors of the Debtor's estate, over 120 employees based in this venue, and the Debtor's principals. Disposable income is the total income projected to be received by the Debtor that is not reasonably necessary to be expended for the payment of expenditures necessary for the continuation, preservation, or operation of the business of the Debtor. As the Projections reflect, the total amount of the projected disposable income to be paid to creditors over the 3-year period is $762,227 (the "Projected Disposable Income"). To fund the Plan, (i) the Debtor will provide the Projected Disposable Income to creditors in their order of priority and (ii) the Debtor's principals will fund Effective Date cure costs in connection with the assumption by the Debtor of certain unexpired leases and executory contracts (the "Cure Costs") and other Effective Date Payments to the extent that the Debtor's available cash on the Effective Date is insufficient. The Debtor will (1) use available cash on the Effective Date plus funds infused by the Debtor's principals to pay 100% of certain allowed administrative expense claims (although a portion of the administrative claims required to be paid on the Effective Date of the Plan will be funded from a combination of Debtor's cash on hand as of the Effective Date or contributions by the Debtor's principals, and/or paid over time under the Plan from Projected Disposable Income), (2) use Projected Disposable Income to satisfy 100% of all allowed priority tax claims in equal monthly installments over the life of the Plan, and (3) use Projected Disposable Income to provide distributions to allowed unsecured creditors on a pro rata basis over the three years following the Effective Date of the Plan, or as soon as practicable thereafter. The Debtor's one alleged secured claimant, the San Ramon landlord, which has filed a bifurcated claim in the amount of $680,742.71 as a secured claim and an unsecured in the amount of $398,146.79 shall receive the $30,000 currently held by the sheriff of Alameda County, although the Debtor contends that the claim of the San Ramon landlord is fully unsecured as a matter of law. The balance of the San Ramon landlord's claim shall be treated as an unsecured claim. These payments are in addition to the Cure Costs which will be funded in part by the Debtor's principals. The Debtor is proposing a three-year Plan. A three-year Plan will exceed the present-day value of any potential projected disposable income that the Debtor would achieve in either a four or five year plan because under a three year Plan, the Debtor's principals will have already provided a new value infusion of $108,000 to permit the Debtor to satisfy payroll obligations and a further cash infusion of approximately $71,533.74 to fund Effective Date payment obligations. Further, in order to allow unsecured creditors to receive a meaningful dividend, the Debtor's principals have agreed to personally satisfy potential capital expenditure obligations that may be required by its franchisor, Buffalo Wild Wings ("BWW") over the life of the Plan. Class 3 consists of General Unsecured Claims. Each holder of an Allowed General Unsecured Claim will be entitled to a receive a pro rata distribution over the three years following the Effective Date of the Plan or as soon as practicable thereafter from the Projected Disposable Income. The estimated dividend to unsecured claims will be in the range of 7-9% which could increase if the Debtor and its principals are able to settle certain pre-petition litigation outside of the Plan. The allowed unsecured claims total $2,300,000 to $2,500,000. This Class is impaired. Class 4 consists of Equity Interest Holders Ishwinder Judge Pravesh Chopra. Each holder will be entitled to retain their equity interest. The Debtor will pay its Projected Disposable Income to creditors, including priority creditors, in order to perform under and consummate the Plan. The Debtor will use these funds to pay 100% to priority creditors and allowed unsecured creditors on a pro rata basis each over the three years following the Effective Date of the Plan or as soon as practicable thereafter. In addition to the Projected Disposable Income, the required Effective Date payments will be satisfied by a combination of the Debtor's available cash from operations, as of the Effective Date and personal funds advanced by the Debtor's principals in the amount of approximately $71,533.74. A full-text copy of the Plan of Reorganization dated April 25, 2023 is available at https://bit.ly/423SyHB from PacerMonitor.com at no charge. Attorney for the Plan Proponent: Mark S. Lichtenstein, Esq. Akerman LLP 1251 Avenue of the Americas, 37th Floor New York, NY 10020 Tel: (212) 880-3800 Fax: (212) 880-8965 Email: mark.lichtenstein@akerman.com About FJC Management Inc. FJC Management Inc. operates fast casual restaurants in California known as "Buffalo Wild Wings" franchises. Its principal business office is located at 2150 Portola Ave., Livermore, Calif. The Debtor operates four "Buffalo Wild Wings" restaurant locations in Livermore, Dublin, Fairfield, and Vacaville, in California. FJC Management sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Calif. Case No. 23-40085) on Jan. 25, 2023. In the petition signed by Pravesh Chopra, president, the Debtor disclosed up to $10 million in both assets and liabilities. Judge William J. Lafferty, III oversees the case. Akerman, LLP, is the Debtor's legal counsel. FRANCO'S PAVING: Seeks to Hire Tran Singh as Counsel ---------------------------------------------------- Franco's Paving, LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Tran Singh LLP as counsel. The firm will represent the interest of the Debtor in the Chapter 11 Case , analyze claims of the estate, prepare motions and pleadings to protect the estate's interest. The firm will be paid $400 to $650 per hour for attorneys, and $85 per hour for paraprofessionals. The firm was provided a retainer in the amount of $20,000. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Susan Tran Adams, Esq., a partner at Tran Singh LLP, disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Susan Tran Adams, Esq. Tran Singh LLP 2502 La Branch Street Houston, TX 77004 Tel: (832) 975-7300 Fax: (832) 975-7301 Email: info@ts-llp.com About Franco's Paving Franco's Paving LLC provides paving services. Franco's Paving LLC filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-20069) on March 17, 2023. In the petition filed by Isaias Franco, as president, the Debtor reported assets and liabilities between $1 million and $10 million. Sylvia Mayer has been appointed Subchapter V Trustee. The Debtor is represented by Susan Tran Adams, Esq. at Tran Singh LLP. G.A.H. BAR-B-Q: Court OKs Cash Collateral Access Thru June 7 ------------------------------------------------------------ The U.S. Bankruptcy Court for the Middle District of Florida, Orlando Division, authorized G.A.H. Bar-B-Q, Inc. to use cash collateral on a further interim basis in accordance with the budget, through June 7, 2023. The Debtor is permitted to use cash collateral to pay: (a) amounts expressly authorized by the Court, including payments to the Subchapter V Trustee and payroll obligations incurred post-petition in the ordinary course of business; (b) the current and necessary expenses set forth in the budget, plus an amount not to exceed 10% for each line item; and (c) additional amounts as may be expressly approved in writing by Florida Business Bank, provided the Debtor timely tenders (on or before April 20, 2023) an adequate protection payment to Seacoast i/a/o $2,868, which monthly payment will continue each month thereafter until confirmation of a plan, conversion or dismissal of the case. As adequate protection, the Secured Creditors will have a perfected post-petition lien against cash collateral to the same extent and with the same validity and priority as the prepetition lien, without the need to file or execute any documents as may otherwise be required under applicable non-bankruptcy law. The Debtor will maintain insurance coverage for its property in accordance with the obligations under all applicable loan and security documents. A continued preliminary hearing on the matter is set for June 7 at 2 p.m. A copy of the Court's order and the Debtor's budget is available at https://bit.ly/423Zt3l from PacerMonitor.com. The Debtor projects total expenses, on a weekly basis, as follows: $28,003 for the week May 1, 2023; $26,503 for the week May 8, 2023; $26,503 for the week May 15, 2023; $26,503 for the week May 22, 2023; and $27,503 for the week May 29, 2023. About G.A.H. Bar-B-Q, Inc. G.A.H. Bar-B-Q, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-00428) on February 3, 2023. In the petition signed by Gregory Helwig, sole shareholder, the Debtor disclosed up to $10 million in assets and up to $500,000 in liabilities. Judge Tiffany P. Geyer oversees the case. Daniel A. Velasquez, Esq., at Latham Luna Eden and Beaudine LLP, represents the Debtor as legal counsel. GENESIS GLOBAL: Taps M3 Advisory Partners as Financial Advisor -------------------------------------------------------------- Genesis Global Holdco, LLC and its affiliates received approval from the U.S. Bankruptcy Court for the Southern District of New York to employ M3 Advisory Partners, LP as financial advisor. Alvarez & Marsal Holdings, LLC is the financial advisor hired by the Debtors in connection with their Chapter 11 cases. However, Alvarez & Marsal has provided financial advisory services to Alameda Research Ltd. and its affiliates, including FTX Trading Ltd. and Alameda Research, LLC and, therefore, must recuse themselves from any involvement in disputes related to the Debtors' FTX accounts or other adverse matters. M3 Advisory Partners' services are needed to provide financial advisory services regarding FTX. M3 Advisory Partners will be paid at these rates: Managing Partner $1,350 per hour Senior Managing Director $1,245 per hour Managing Director $1,025 to $1,150 Director $840 to $945 per hour Vice President $750 per hour Senior Associate $650 per hour Associate $550 per hour Analyst $450 per hour Kunal Kamlani, a senior managing director at M3 Advisory Partners, disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Kunal S. Kamlani M3 Advisory Partners, LP 1700 Broadway, 19th Floor New York, NY 10019 Tel: (212) 202-2200 Email: info@m3-partners.com About Genesis Global Holdco Genesis Global Capital, LLC (GGC) and Genesis Asia Pacific PTE. LTD. (GAP) provide lending and borrowing, spot trading, derivatives and custody services for digital assets and fiat currency. Genesis Global Holdco, LLC owns 100% of GGC and GAP. Genesis Global Holdco, LLC, GGC and GAP each filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 23-10063) on Jan. 19, 2023. The cases are pending before the Honorable Sean H. Lane. At the time of the filing, Genesis Holdco reported $100 million to $500 million in both assets and liabilities. Genesis Holdco is a sister company of Genesis Global Trading, Inc. ("GGT") and 100% owned by Digital Currency Group, Inc. ("DCG"). GGT, DCG and certain of the Holdco subsidiaries are not included in the Chapter 11 filings. The non-debtor subsidiaries include Genesis UK Holdco Limited, Genesis Global Assets, LLC, Genesis Asia (Hong Kong) Limited, Genesis Bermuda Holdco Limited, Genesis Custody Limited ("GCL"), GGC International Limited ("GGCI"), GGA International Limited, Genesis Global Markets Limited, GSB 2022 II LLC, GSB 2022 III LLC and GSB 2022 I LLC. The Debtors tapped Cleary Gottlieb Steen & Hamilton, LLP as bankruptcy counsel; Morrison Cohen, LLP as special counsel; Alvarez & Marsal Holdings, LLC as financial advisor; and Moelis & Company, LLC as investment banker. Kroll Restructuring Administration, LLC is the Debtors' claims and noticing agent and administrative advisor. The ad hoc group of creditors is represented by Kirkland & Ellis, LLP and Kirkland & Ellis International, LLP. The ad hoc group of Genesis lenders is represented by Proskauer Rose, LLP. The U.S. Trustee for Region 2 appointed an official committee to represent unsecured creditors in the Debtors' Chapter 11 cases. The committee tapped White & Case, LLP as bankruptcy counsel; Houlihan Lokey Capital, Inc. as investment banker; Berkeley Research Group, LLC as financial advisor; and Kroll as information agent. GIGAMONSTER NETWORKS: Seeks to Extend Exclusivity to Sept. 13 ------------------------------------------------------------- GigaMonster Networks, LLC and its affiliates ask the U.S. Bankruptcy Court for the District of Delaware to extend the exclusive periods during which the Debtors have the exclusive right to file a plan and to solicit acceptances thereof to September 13, 2023 and November 13, 2023, respectively. The Debtors claim that they have obtained first day relief to ensure a smooth transition into chapter 11 and filed their schedules of assets and liabilities and statements of financial affairs, among other tasks. The Debtors explained that they are requesting the extension to focus on working with the Committee and Barings Asset-Based Income Fund (US) LP, the prepetition agent, to negotiate and develop a consensual chapter 11 plan. The Debtors also stated that they have recently completed the sale to Skywire and expects to prepare and seek approval of a disclosure statement and chapter 11 plan. The Debtors' exclusive filing and solicitation periods are currently set to expire on May 16, 2023 and July 15, 2023, respectively. GigaMonster Networks, LLC is represented by: Laura Davis Jones, Esq. David M. Bertenthal, Esq. Timothy P. Cairns, Esq. PACHULSKI STANG ZIEHL & JONES LLP 919 North Market Street, 17th Floor Wilmington, DE 19899 Tel: (302) 652-4100 Email: ljones@pszjlaw.com dbertenthal@pszjlaw.com tcairns@pszjlaw.com About GigaMonster Networks GigaMonster Networks, LLC and affiliates develop and deploy universal access networks (UANs) in multi-family and commercial real estate properties, providing internet, video and other network services to approximately 400 customer properties and nearly 35,000 end-user subscribers. The Debtors contract with property owners to set up UANs in their buildings and also provide internet services to subscribers in those buildings. The Debtors sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10051) on Jan. 16, 2023. In the petition signed by its chief restructuring officer, Rian Branning of Novo Advisors, LLC, GigaMonster Networks disclosed up to $100 million in both assets and liabilities. Judge Kate Stickles oversees the cases. The Debtors tapped Pachulski Stang Ziehl and Jones, LLP as legal counsel; Novo Advisors, LLC as restructuring advisor; Bank Street Group, LLC as investment banker; and Kroll Restructuring Administration as claims and noticing agent. On Jan. 30, 2023, the U.S. Trustee for Region 3 appointed an official committee to represent unsecured creditors in the Debtors' Chapter 11 cases. The committee tapped Faegre Drinker Biddle & Reath, LLP as legal counsel and M3 Advisory Partners, LP as financial advisor. GLOBAL MEDICAL: S&P Downgrades ICR to 'CCC+', Outlook Negative -------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on air and ground medical transport service provider Global Medical Response Inc. (GMR) to 'CCC+' from 'B-'. The outlook is negative. At the same time, S&P lowered its issue-level ratings on the company's first-lien secured debt to 'CCC+' from 'B-' to reflect the lower issuer credit rating. The '3' recovery rating is unchanged. The negative outlook reflects the risk that GMR will not refinance its capital structure before the first of its term loans becomes a current obligation in March 2024. It also reflects the increasing risk of a debt restructuring or below par repurchase that we view as distressed and tantamount to default. S&P said, "The downgrade reflects our view that GMR's capital structure is unsustainable over the medium to long term. We believe GMR highly depends on a multitude of favorable conditions--including moderating labor and fuel costs, weather, and improving capital markets--to meet its financial commitments over the next 12-24 months. While we expect GMR to benefit from cost-cutting and rate improvement in the second half of 2023, we believe the company's ability to generate sufficient operating cash flow to cover its fixed costs is highly uncertain. We expect GMR would need to refinance its 2025 debt maturities at a higher cost of capital. However, we do not anticipate credit or payment pressure in the next 12 months given that total liquidity--cash balance and asset-based lending (ABL) availability--appears adequate." Operating performance for the full year 2023 is likely weaker than expected, due to disappointing early results. First-quarter performance was impaired by two aircraft accidents which occurred in relatively quick succession, leading to the stand-down of several bases for a couple of weeks. In addition, GMR staffed for an anticipated strong flu season during the first quarter of 2023 that instead materialized in the fourth quarter of 2022. S&P said, "As such, we expect significant margin pressure in the first quarter. We expect operational improvement in the second half due to the realization of executed cost savings, including ground market exits and reduced headcount. While we had already anticipated that operating cash flow would be weak during 2023, we now expect it will be about $50 million less than our forecast from late fall 2022." Significant debt maturities loom in 2025, with elevating refinancing risk given current capital market conditions. GMR has about $5.4 billion of funded debt outstanding, with $4.3 billion coming due in 2025 ($3.7 billion of term loan B and $600 million of senior notes). On March 14, 2024, $1.8 billion of debt will become current with a further $2.5 billion of debt becoming current on Oct. 1, 2024. The $700 million ABL (undrawn) matures on the earlier of May 16, 2027, or 91 days prior to the maturity of the term loan Bs, senior notes, or second-lien term loan. S&P said, "Given prevailing capital market conditions, we expect GMR will have difficulty refinancing its capital structure at favorable terms. We assume that even if GMR refinances later this year, it will be burdened by an incremental $100 million-$160 million of interest expense in 2024 and beyond due to substantially higher prevailing margins." GMR's debt is trading very low, increasing the risk of a distressed exchange. The term loans and notes have steadily traded down over the past year, with a particularly steep decline in late March. The loans are trading in the low-60s while the notes are yielding close to 30%. S&P said, "We view both values as heavily distressed. We believe this increases the risk that GMR will pursue a distressed debt restructuring or below par repurchase in which lenders receive less than the original promise, which we would view as tantamount to default." Fixed-cost coverage appears insufficient over the next 12-24 months, especially when layering on less favorable refinancing terms. S&P said, "Our rating considers GMR's higher cash flow requirements than other health care services issuers, due to significant lease payments and amortization on aircraft financed debt. We now forecast that operating cash flow in 2023 and 2024 will be insufficient to cover mandatory capital expenditure, debt amortization, and principal portion of lease payments." S&P's negative outlook reflects elevated refinancing risk as GMR approaches its significant 2025 maturities and the increasing likelihood that it will pursue a distressed exchange. S&P could lower the rating if: -- GMR cannot address its upcoming maturities before the first tranche becomes current in March 2024; or -- S&P believes the likelihood of GMR completing a debt restructuring or below par debt repurchase that it view as a distressed has increased. S&P could raise the rating if it views the capital structure as sustainable over the medium to long term. This could occur if: -- GMR refinanced its upcoming maturities; and -- S&P believes operating cash flow would exceed mandatory capital expenditure, debt amortization, and principal portion of lease payments. ESG credit indicators: E-2, S-3, G-3 S&P said, "Social factors are a moderately negative consideration in our credit rating analysis of GMR. We believe the No Surprises Act that went into effect in 2022 is likely to pressure reimbursement rates on emergency air medical services from out-of-network providers, which we estimate account for less than 5% of GMR's annual revenue, and delay the receipt of payment if reimbursement rates are disputed. Furthermore, GMR generates 40%-45% of its transport revenue from the less profitable services paid by Medicare and Medicaid. That said, we believe regulators appreciate the social benefits these companies provide by saving lives. Governance factors are a moderately negative consideration. Our assessment of the company's financial risk profile as highly leveraged reflects corporate decision-making that prioritizes the interests of controlling owners, in line with our view of most rated entities owned by private-equity sponsors. Our assessment also reflects the generally finite holding periods and focus on maximizing shareholder returns." GOBO LTD: Court OKs Interim Cash Collateral Access -------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Ohio, Eastern Division, authorized Gobo, Ltd. to use cash collateral on an interim basis in accordance with its agreement with Huntington National Bank. The parties agreed the Debtor may use cash collateral until the earlier to occur of (a) expiration of the time period covered by the Budget (March 1, 2023, through May 31, 2023); or (b) the occurrence of a Termination Event. As adequate protection, the Secured Creditor is re-granted post-petition liens to the Secured Creditor to the same extent, amount, and priority as its respective pre-petition security interests, if any, in cash collateral in existence on the Petition Date, without the necessity of the re-filing of any UCC Financing Statement or other documents. The Debtor will, for each month during the Interim Period, pay to the Secured Creditor an amount equal to the interest at the applicable non-default contract rate of interest on the Secured Creditor's claims, in the amount of $13,974, no later than the 15th day of each month. The Debtor's authority to use cash collateral will automatically and immediately terminate without any further action by the Secured Creditor or the Court and a Termination Event will occur without prior notice upon the occurrence of any of the following: (i) The Debtor's Chapter 11 case is dismissed or converted to a case under Chapter 7 of the Bankruptcy Code; (ii) The earlier of the date of the entry of an order of this Court appointing an examiner with enlarged powers (beyond those set forth in 11 U.S.C. Sections 1104(c) and 1106(a)(3) and (4) for the Debtor; or the date the Debtor files a motion, application or other pleading consenting to or acquiescing in any such appointment; or (iii) The Court suspends the Debtor's Chapter 11 Case under 11 U.S.C. Section 305. A copy of the Court's order and the Debtor's budget is available at https://bit.ly/3VaEWIw from PacerMonitor.com. The Debtor projects $30,609 in total revenue and $28,378 in total expenses for the period from March 1 to May 31, 2023. About Gobo, Ltd. Gobo, Ltd. is an Ohio limited liability company which owns and operates real estate generally known as 4000 Horizons Drive, Columbus, Ohio 43220 . It is owned by Donald A. Lee and his wife Cheryl B. Lee. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Ohio Case No. 23-50619) on March 1, 2023. In the petition signed by Donald A. Lee, as president, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Mina Nami Khorrami oversees the case. Myron N. Terlecky, Esq., at Strip Hoppers Leithart McGrath and Terlecky Co., LPA, represents the Debtor as legal counsel. GOODLIFE PHYSICAL: Court OKs Deal on Cash Collateral Access ----------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California, Los Angeles Division, authorized Goodlife Physical Medicine Corp to use cash collateral on an interim basis in accordance with its agreement with the U.S. Small Business Administration. The Debtor and the SBA have reached a further agreement to permit the Debtor to use cash collateral from March 30 through July 15, 2023, for payment of the ordinary and necessary expenses as set forth in the budget. Pre-petition, on February 25, 2022, the Debtor executed an SBA Note, pursuant to which the Debtor obtained a COVID-19 Economic Injury Disaster Loan in the amount of $1.5 million. On May 14, 2022, the Debtor executed a First Modification of Note, pursuant to which the Debtor increased the Original SBA Loan by $100,000 in the cumulative amount of $1.6 million. The terms of the Modified Note require the Debtor to pay principal and interest payments of $8,468 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 March 2, 2052. Interest has accrued and continues to accrue since February 25, 2022. 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 $1.652 million. As evidenced by a Security Agreement and subsequently the Amended Security Agreement executed on May 14, 2022 and a valid UCC-1 filing on March 14, 2022 as Filing Number U220173912326, the SBA Loan is secured by all tangible and intangible personal property of the Debtor. As adequate protection, retroactive to the Petition Date, the SBA will receive a replacement lien(s) that is deemed valid, binding, enforceable, non-avoidable, and automatically perfected, effective as of the Petition Date, on all postpetition revenues of the Debtor to the same extent, priority and validity that its lien attached to the Personal Property Collateral. The scope of the Replacement Lien is limited to the amount (if any) that the cash collateral diminishes post-petition as a result of the Debtor's post-petition use of the cash collateral. The Debtor will remit adequate protection payments to the SBA in the amount of $3,500 per month, to be paid on June 1, 2023 and July 1, 2023. Adequate protection payments will include the Debtor's SBA Loan number and be sent to the payment address on the SBA Proof of Claim or may be paid by wire transfer or pay.gov. The SBA will be entitled to a super-priority claim over the life of the Debtor's bankruptcy case, pursuant to 11 U.S.C. sections 503(b), 507(a)(2) and 507(b), which claim will be limited to any diminution in the value of the SBA's collateral, pursuant to the SBA Loan, as a result of the Debtor's use of cash collateral on a post-petition basis. A copy of the stipulation and the Debtor's budget is available at https://bit.ly/3LHizY5 from PacerMonitor.com. The Debtor projects $784,872 in total revenue and $780,898 in total expenses. A copy of the order is available at https://bit.ly/3VaM5sa from PacerMonitor.com. About Goodlife Physical Medicine Corp Goodlife Physical Medicine Corp, a company in Redondo Beach, Calif., filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 23-10340) on Jan. 23, 2023. In the petition filed by its owner, David Carry, the Debtor reported up to $50,000 in assets and $1 million to $10 million in liabilities. Judge Sandra R. Klein oversees the case. The Debtor is represented by Leslie A. Cohen, Esq., at Leslie Cohen Law, PC. GRAVITY HOLDINGS: Unsecureds to Get $500 per Month for 60 Months ---------------------------------------------------------------- Gravity Holdings, Inc., filed with the U.S. Bankruptcy Court for the Western District of Louisiana a Plan of Reorganization under Subchapter V dated April 24, 2023. Debtor is engaged in management of several separate pieces of immovable property located in Central Louisiana. Debtor was formed and registered with the Louisiana Secretary of State on June 3, 2015, and has been in operation since that time. Debtor is wholly owned by David Blumenstock, who is the sole shareholder of the corporation. At the time this case was filed (October 26, 2022) debtor was the owner of immovable property on which is located 33 residential housing units located on Mansour Drive in Alexandria, Rapides Parish, Louisiana (hereinafter sometimes referred to as the "Duplexes"). Debtor previously filed a case under Chapter 11 [Case No. 20 80549] in this court and its plan providing for reduced monthly payments to secured creditors was confirmed by this court. Debtor was not able to recover from the rental disruptions caused by and during the COVID-19 Pandemic. After the easing of the Pandemic the debtor realized substantial increases in insurance premiums further eroding its ability to make payments to its secured creditors and also pay the costs of further operations. This Plan of Reorganization proposes to pay creditors of Gravity Holdings, Inc., from the proceeds of the sale of the duplexes. This Plan provides for 5 classes of claims, 1 class of priority claims, and 2 classes of secured claims, one class of unsecured claims, as well as one class of equity security holders. This Plan also provides for the payment of administrative claims. Class 4 consists of the Claim of the Unsecured Creditors. The total amount of all unsecured claims is not known due to the pending sale of the assets. After the payment of all administrative claims in this case including attorney's fees and Chapter 11 Subchapter V Trustee fees, General Unsecured Claims shall be paid $500.00 per month for 60 months. Payments will begin after all Administrative Expenses have been paid in full. Class 5 consists of Equity interests in the debtor. Unless otherwise provided herein, title to property of the estate, subjecting to existing liens found to be valid in bankruptcy, shall vest in the debtor upon confirmation of this Plan. Equity Security Holders will retain their ownership interest in the debtor Upon confirmation, the Debtor will be authorized to execute any and all property transfers contemplated hereunder. Such transfers shall be pursuant to such documents of title as reasonably required by parties and in accordance with normal business practices. The provisions of the automatic stay and any stay or injunction that becomes effective upon confirmation will be lifted on ex parte motion to the extent necessary for good title to be transferred to such secured creditor. Upon the Effective Date, all secured creditors lienholders and holders of guaranty claims hereunder shall have the right to receive, in form and substance reasonably acceptable to their respective counsel and counsel for the Debtor, new notes and security devices evidencing the obligations assumed by Gravity Holdings, Inc., under the terms and conditions of this Plan of Reorganization. Unless otherwise specifically set forth herein, all secured creditors will retain all pre-petition liens to the extent of their respective secured claims. The funds necessary for the satisfaction of the creditors' claims shall be derived from net operating profits of the debtor as well accounts receivable collected after the filing of the case A full-text copy of the Plan of Reorganization dated April 24, 2023 is available at https://bit.ly/3LfPhOL from PacerMonitor.com at no charge. Attorney for the Debtor: Thomas R. Willson, Esq. 1330 Jackson Street Alexandria, LA 71301 Tel: (318) 442-8658 Fax: (318) 442-9637 Email: rocky@rockywillsonlaw.com About Gravity Holdings Gravity Holdings, Inc., a company in Elmer, La., filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. W.D. La. Case No. 22-80538) on Oct. 26, 2022, with $2,113,100 in assets and $2,077,503 in liabilities. Lucy G. Sikes has been appointed as Subchapter V trustee. Judge Stephen D. Wheelis oversees the case. The Debtor tapped Thomas Willson, Esq., a practicing attorney in Alexandria, La., to handle its Chapter 11 case. Roland D. Kraushaar, CPA is the Debtor's accountant. GREENHEART NY: Unsecureds Will Get 20% of Claims over 5 Years ------------------------------------------------------------- Greenheart NY, Inc., filed with the U.S. Bankruptcy Court for the Southern District of New York a Subchapter V Plan of Reorganization dated April 25, 2023. The Debtor was incorporated on November 18, 2019, under the laws of the State of New York and currently maintains its principal place of business at One Liberty Plaza, Suite 2373, New York, New York 10006 ("NY Office"). The Debtor's primary purpose upon incorporation was to focus on providing construction management advisory services to New York property owners looking to develop and construct residential real property. In other words, to act as a construction project manager. Rowena Mohabir is the president and sole shareholder of the Debtor and makes all of the major decisions for the Debtor. The events in the Arbitration Proceeding made the Debtor unable to focus its efforts on obtaining new contracts and building its business. The Debtor filed the instant bankruptcy to obtain the breathing spell of the bankruptcy process in order to refocus its efforts on rebuilding its business and generating income so that it can pay its debts. The Debtor continues and intends to continue to focus its efforts on acquiring new contracts and rebuilding its business and currently has 2 additional contracts that it is working on securing. Under this Plan, the Debtor proposes to use all projected disposable income for the period of 5 years in accordance with the terms prescribed in Section 1191(c)(2) of the Bankruptcy Code which disposable income is projected as approximately $120,000, which will be used to: (i) pay Allowed Priority Tax Claims pursuant to the extent permitted in Section 507(a)(8) of the Bankruptcy Code, and (ii) make distributions to each of its Allowed General Unsecured Creditors an anticipated pro rata distribution of approximately 20%. The Debtor will use all funds in its DIP Account on the Effective Date to: (i) pay all Allowed Administrative Claims in full, and (ii) pay all Professional Fee Claims in full. It is anticipated that there will be insufficient funds in the Debtor's DIP Account on the Effective Date to pay all Allowed Administrative Claims and Professional Fee Claims in full. As such, the Debtor's Principal will contribute her own funds in the total amount of the difference necessary to pay all Allowed Administrative Claims and Professional Fee Claims in full on the Effective Date of the Plan, which will also allow for an increased distribution to Allowed General Unsecured Claims. Class 1 consists of all General Unsecured Claims. The allowed unsecured claims total $584,609.85. Each holder of an Allowed General Unsecured Claim shall receive, in exchange for full and final satisfaction, settlement, release and compromise of such Allowed Claim, payment of approximately 20% of their Allowed Claims, in regular installments paid over a period not exceeding 5 years pursuant to the Plan. Class 1 is impaired, and the holders of the Allowed General Unsecured Claims are entitled to vote on the Plan. Based upon the projections, Allowed General Unsecured Claims will receive an estimated distribution of $13,408.00 in the year 2023, $15,054.19 in the year 2024, $26,205.68 in the year 2025, $30,494.25 in the year 2026, and $35,235.67 in the year 2027, for a total of $120,397.79. Any balance(s) on said allowed claims in this Class after payment hereunder, are deemed cancelled under this Plan. Class 2 consists of all Equity Interests. The holders of Allowed Equity Interests shall retain their equity interests in the Debtor but shall receive no other distribution under the Plan. Class 2 is unimpaired, and the holders of the Allowed Equity Interests are conclusively presumed to have accepted the Plan and are not entitled to vote. On the Effective Date, the Debtor believes that it will have a small portion of the Cash on hand necessary to satisfy a portion of the Allowed Priority Tax Claims and/or Allowed Administrative Claims but not the full amount. In light of this, the Debtor's Principal has agreed to contribute the total amount of Cash necessary to ensure that all Allowed Priority Tax Claims and/or Administrative Claims are paid in full on the Effective Date pursuant to this Plan. The Disbursing Agent shall make all payments required under the Plan. A full-text copy of the Subchapter V Plan dated April 25, 2023 is available at https://bit.ly/41MsctY from PacerMonitor.com at no charge. Attorney for the Debtor: Kamini Fox, Esq. Kamini Fox, PLLC 825 East Gate Blvd., Suite 308 Garden City, NY 11530 Tel: (516) 493-9920 Email: kamini@kfoxlaw.com About Greenheart NY Greenheart NY, Inc. was incorporated on November 18, 2019, under the laws of the State of New York and currently maintains its principal place of business at One Liberty Plaza, Suite 2373, New York, New York 10006. The Debtor filed a Chapter 11 bankruptcy petition (Bankr. S.D.N.Y. Case No. 23-10091) on Jan. 25, 2023, with as much as $1 million in both assets and liabilities. Judge Michael E. Wiles oversees the case. The Debtor tapped Kamini Fox, Esq., at Kamini Fox, PLLC as counsel and BLG CFO LLC, doing business as Bottom Line CFOS, as bookkeeper. HAWAIIAN HOLDINGS: AFA Nominates D. Akins as Replacement Director ----------------------------------------------------------------- The Association of Flight Attendants (AFA) notified Hawaiian Holdings, Inc. that William S. Swelbar, the current director designee of the AFA, will depart from the Board and that the AFA will nominate Daniel W. Akins as Mr. Swelbar's replacement. Mr. Swelbar's departure and Mr. Akins' appointment will be effective as of May 16, 2023. Mr. Swelbar's departure is not a result of any disagreement with the Company relating to the Company's operations, policies or practices. It is expected that, effective upon his appointment, Mr. Akins will be appointed to the Board's Safety Committee. It is the Company's understanding that Mr. Akins has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K. Mr. Akins will participate in the director benefits arrangements applicable to all non-employee directors as described in the Company's definitive proxy statement filed with the Securities and Exchange Commission on April 5, 2023. In addition, the Company will enter into its standard form of indemnification agreement with Mr. Akins. The AFA, as the sole holder of record of the only outstanding share of Hawaiian Holdings, Inc. Series C Special Preferred Stock, is entitled, under the Company's Amended and Restated By-laws, to nominate a director to the Company's Board of Directors. About Hawaiian Holdings Hawaiian Holdings, Inc.'s primary asset is sole ownership of all issued and outstanding shares of common stock of Hawaiian Airlines, Inc. The Company is engaged in the scheduled air transportation of passengers and cargo amongst the Hawaiian Islands (the Neighbor Island routes) and between the Hawaiian Islands and certain cities in the United States (the North America routes together with the Neighbor Island routes, the Domestic routes), and between the Hawaiian Islands and the South Pacific, Australia, New Zealand and Asia (the International routes). Hawaiian Holdings reported a net loss of $240.08 million for the year ended Dec. 31, 2022, a net loss of $144.77 million for the year ended Dec. 31, 2021, and a net loss of $510.93 million for the year ended Dec. 31, 2020. As of Dec. 31, 2022, the Company had $4.14 billion in total assets, $1.12 billion in total current liabilities, $1.58 billion in long-term debt, $1.10 billion in other liabilities and deferred credits, and a total shareholders' equity of $333.26 million. * * * This concludes the Troubled Company Reporter's coverage of Hawaiian Holdings until facts and circumstances, if any, emerge that demonstrate financial or operational strain or difficulty at a level sufficient to warrant renewed coverage. HEARTLAND DENTAL: S&P Rates New First-Lien Term Loan 'B-' --------------------------------------------------------- S&P Global Ratings assigned its 'B-' issue-level rating and '3' recovery rating to Heartland Dental LLC's proposed amend-and-extend first-lien term loan (about $1.87 billion) and $500 million senior secured notes (pari passu with the first-lien term loan). The '3' recovery rating indicates its expectation for meaningful (50%-70%; rounded estimate: 50%) recovery in the event of a payment default. The company is seeking to extend its existing first-lien term loan by three years to April 30, 2028, from April 30, 2025. At the same time, it is seeking to raise up to $500 million of senior secured notes, which it will use the proceeds from to partially refinance its existing debt and for general corporate purposes. Heartland Dental's sponsors, KKR and Ontario Teachers' Pension Plan, will also contribute about $200 million of new cash equity to support this transaction. The company has also received a $75 million equity investment commitment from Align Technology Inc. (known for its Invisalign clear aligners). Heartland will use this equity for general corporate purposes, which may include funding the expansion of its footprint and other strategic initiatives. The transaction will improve the company's liquidity and support its longer-term growth. S&P said, "We expect the majority of the terms under the new term loan credit agreement will be consistent with the existing terms, albeit with a higher margin over the benchmark rate. We will withdraw our ratings on the company's existing first-lien term loans following the close of the transaction. All of our other ratings, including our 'B-' issuer credit rating and stable outlook on Heartland, are unchanged. "We expect the company will increase its S&P Global Ratings-adjusted EBITDA by over $100 million in 2023, relative to the previous year, due to the roll-off of $50 million-$60 million of merger and acquisition (M&A) costs related to the ADPI transaction, its $40 million-$45 million of already locked-in price increases, and its realization of previously actioned cost savings (such as from the renegotiation of its insurance contract, the reduction in its discretionary spending, the annualization of its acquired businesses, and the closure of its unprofitable offices). These factors will likely help offset the pressure stemming from increased labor expense for its hygienists and wage inflation for its dental and business assistants. Therefore, we expect Heartland's S&P Global Ratings-adjusted leverage will decline, but remain high, at about 10x in 2023, which compares with approximately 15x in 2022. "We expect Heartland will maintain adequate liquidity over the next 12 months, with cash balances of about $225 million pro forma for the transaction, estimated 2023 cash flow from operations of $30 million, and $280 million of revolver availability, which we anticipate will adequately cover its about $20 million of debt amortization, about $30 million of maintenance capital expenditure (capex), and growth investments. "The stable outlook reflects our expectation that the company's S&P Global Ratings-adjusted leverage will improve to about 10x, supported by an increase in its EBITDA from improved cost controls and the continued maturation of its new offices. It also reflects our expectation that Heartland's free operating cash flow (after maintenance capex) will be close to break even in 2023." ISSUE RATINGS--RECOVERY ANALYSIS Key analytical factors -- Heartland's proposed capital structure comprises a $280 million revolver due 2027, a $1.87 billion amend-and-extend first-lien term loan due 2028, $500 million of new senior secured notes due 2028 (pari passu with the first-lien term loan), and $310 million of senior unsecured notes due 2026. -- S&P values the company on a going-concern basis using a 5x multiple of its projected emergence EBITDA of $300 million. -- S&P's simulated default scenario assumes a default in 2025 due to increased competition and a decline in third-party reimbursement rates. Simulated default assumptions -- Simulated year of default: 2025 -- Implied enterprise value multiple: 5x -- EBITDA at default: $300 million Simplified waterfall -- Net enterprise value (after 5% administrative costs): $1.4 billion -- Collateral value available to secured debt: $1.4 billion -- First-lien secured debt: $2.65 billion --Recovery expectations: 50%-70% (rounded estimate: 50%) -- Value available to senior unsecured debt: Negligible -- Senior unsecured debt: $320 million --Recovery expectations: 0%-10% (rounded estimate: 0%) Note: All debt amounts include six months of prepetition interest. HEMISPHERE MEDIA: Moody's Withdraws 'B2' Corporate Family Rating ---------------------------------------------------------------- Moody's Investors Service has withdrawn all ratings of Hemisphere Media Holdings, LLC including the B2 Corporate Family Rating, B2-PD Probability of Default Rating and B2 ratings on the bank credit facilities. RATINGS RATIONALE Moody's has decided to withdraw the ratings for its own business reasons. Withdrawals: Issuer: Hemisphere Media Holdings, LLC Corporate Family Rating, Withdrawn, previously rated B2 Probability of Default Rating, Withdrawn, previously rated B2-PD Senior Secured First-Lien Revolving Credit Facility due 2027, Withdrawn, previously rated B2 Senior Secured First-Lien Term Loan A due 2027, Withdrawn, previously rated B2 Outlook Actions: Issuer: Hemisphere Media Holdings, LLC Outlook, Changed To Rating Withdrawn From Stable Hemisphere Media Holdings, LLC, headquartered in Miami, FL, is a US Spanish-language TV and cable network business serving the Hispanic population in the US, Latin America, and Puerto Rico. Hemisphere owns and operates five cable television networks, WAPA America, Centroamerica TV, and Television Dominicana in the U.S., and Cinelatino and Pasiones in the U.S. and Latin America. The company also owns WAPA, the leading broadcast television network in Puerto Rico and two Puerto Rican radio stations it is in the process of acquiring (pending regulatory approval). In addition, Hemisphere has a 100% interest in Snap Media, a distributor of content to broadcast and cable television networks and OTT, SVOD, and AVOD platforms in Latin America. HIGH STREET: Subchapter V Plan Confirmed by Judge ------------------------------------------------- Judge Martin Glenn has entered an order confirming the First Amended Subchapter V Plan of The High Street, Inc. The Plan satisfies the requirements of Sections 1122 and 1123 of the Bankruptcy Code and its classification of Claims is reasonable, proper and not impermissibly discriminatory with respect to each Class of Claims. The Plan satisfies Section 1190 of the Bankruptcy Code and includes a history of the Debtor, a liquidation analysis, the Debtor's projections, and contribution of the Debtor's disposable income (as applicable). The Plan provides for adequate means of its implementation, which includes the initial distribution to be made on the Effective Date. The Plan has been proposed in good faith, is fair and equitable to each Class of Claims, and not by any means forbidden by law. Confirmation of the Plan is not likely to be followed by the need for further financial reorganization of the Debtor, and the Plan is feasible. With respect to each Impaired Class of Claims or Interests, each holder of a Claim or Interest of such Class has either affirmatively accepted the Plan or will receive or retain under the Plan on account of such Claim or Interest, property of a value, as of the Effective Date of the Plan, that is not less than the amount that such holder would so receive or retain if the Debtor was liquidated under chapter 7 of the Bankruptcy Code on the Effective Date. The Plan provides that with respect to any Administrative Expense under Section 503(b) of the Bankruptcy Code or Claim of a kind specified in Section 507(a)(8) of the Bankruptcy Code, the holder of any such Administrative Expense or Claim, if any, will receive payment in full in cash on the Effective Date. A copy of the Plan Confirmation Order dated April 25, 2023 is available at https://bit.ly/3LEsddH from PacerMonitor.com at no charge. Attorneys for the Debtor: Julie Cvek Curley, Esq. Kirby Aisner & Curley, LLP 700 Post Road, Suite 237 Scarsdale, NY 10583 Phone: (914) 401-9502 Email: jcurley@kacllp.com About The High Street The High Street, Inc., sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 22-11655) on Dec. 9, 2022, with up to $50,000 in assets and $100,001 to $500,000 in liabilities. Judge Martin Glenn presides over the case. Julie Cvek Curley, Esq., at Kirby Aisner & Curley, LLP, serves as the Debtor's counsel. HIGHLAND CARGO: Hearing on Cash Collateral Bid Moved to June 6 -------------------------------------------------------------- Highland Cargo 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, the U.S. Small Business Administration, FinWise Bank, Samson MCA LLC, and Diamond Stone Capital. The Debtor requires the use of cash collateral to pay the reasonable expenses it incurs during the ordinary course of its business. The Debtor has three related entities, also in Subchapter V bankruptcy before the Court: (1) ASLM Investments, Inc.; (2) CA Teenies, Inc.; and (3) ASLM Gas Inc. The Debtor, ASLM Investments, CA Techies, and ASLM Gas Inc. have several mutual creditors, most notably Diamond Stone Capital. The Debtor estimates the value of its assets to be $405,400. The Debtor estimates the value of its liabilities to be approximately $2,290,708 in secured claims and approximately $497,465 in unsecured claims. The COVID-19 pandemic, and subsequent inflation and rising gasoline prices, had a significant negative impact on the Debtor's business. In an effort to keep its doors open, the Debtor took out several loans, which the Debtor is now unable to pay back. The Debtor was unable to meet its debt service obligations. In first position, the US Small Business Administration has a $256,821 claim, secured by a UCC financing statement filed on September 16, 2020. Given the estimated value of the Debtor's assets, the SBA's claim is fully secured. The Debtor proposes $1,222 in monthly adequate protection payments to the SBA. In second position is Finwise Bank, secured by a UCC financing statement dated April 19, 2021. The amount secured is estimated at $252,345. Given the estimated value of the Debtor's assets and the superior claim of the SBA, Finwise's claim is secured up to $148,579, and the rest of Finwise's claim is undersecured. The Debtor proposes $1,000 in monthly adequate protection payments to Finwise. In third position, Samson MCA LLC has a $424,588 claim, secured by a UCC financing statement dated January 19, 2022. Samson's claim is fully undersecured. In fourth position, Diamond Stone Capital has a claim for an estimated $1.4 million secured by a UCC financing statement dated February 9, 2022. Diamond's claim is fully undersecured. A copy of the Debtor's motion and budget is available at https://bit.ly/3V9RaAM from PacerMonitor.com. The Debtor projects total expenses, on a monthly basis, as follows: $60,812 for April 2023; $69,122 for May 2023; $69,122 for June 2023; $69,122 for July 2023; $74,812 for August 2023; and $78,812 for September 2023. * * * A hearing on the matter was originally set for April 27, 2023 at 11 a.m. In a docket entry dated April 27, the hearing on the Debtor's request has been continued to June 6, 2023, at 11:00 a.m. 255 E. Temple St. Courtroom 1368 in Los Angeles, California. About Highland Cargo Inc. Highland Cargo, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Calif. Case No. 23-11773) on March 24, 2023, with as much as $10 million in both assets and liabilities. Mandeep Singh, president of Highland Cargo, signed the petition. Judge Vincent P. Zurzolo oversees the case. Michael Jay Berger, Esq., at the Law Offices of Michael Jay Berger, is the Debtor's legal counsel. INTERNAP HOLDING: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Four affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- Internap Holding LLC (Lead Case) 23-10529 5051 Peachtree Corners Circle Suite 200 Norcross GA 30092 Singlehop LLC 23-10530 Hosting Intellect, LLC 23-10531 Datagram LLC 23-10532 Business Description: The Debtors provide compute resources (i.e., an IT industry term referring to the ability to process data) and storage services on demand via an integrated platform. The Debtors' services include: (a) bare metal (which are dedicated, single-tenant servers utilizing Intel and AMD processors enabling high-performance compute with rapid deployment, increased control, enhanced security, and flexible configurations); (b) hosted private cloud environments; (c) cloud computing backup services; and (d) managed security to keep customer data secure and in alignment with compliance requirements. Chapter 11 Petition Date: April 28, 2023 Court: United States Bankruptcy Court District of Delaware Judge: Hon. Craig T. Goldblatt Debtors' Counsel: Monique B. DiSabatino, Esq. Mark Minuti, Esq. SAUL EWING LLP 1201 North Market Street, Suite 2300 P.O. Box 1266 Wilmington, DE 19899 Tel: (302) 421-6800 Email: mark.minuti@saul.com monique.disabatino@saul.com - and - Catherine Steege, Esq. Melissa Root, Esq. Breana Drozd, Esq. JENNER & BLOCK LLP 353 N. Clark Street Chicago, IL 60654 Tel: (312) 923-2952 Email: csteege@jenner.com mroot@jenner.com bdrozd@jenner.com Debtors' Financial Advisor: FTI CONSULTING Debtors' Claims & Noticing Agent: STRETTO, INC. Estimated Assets: $100 million to $500 million Estimated Liabilities: $100 million to $500 million The petitions were signed by Michael T. Sicoli as chief executive officer. Full-text copies of the Debtors' petitions are available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/NEJOU7A/Internap_Holding_LLC__debke-23-10529__0001.0.pdf?mcid=tGE4TAMA https://www.pacermonitor.com/view/NCGZDEI/Singlehop_LLC__debke-23-10530__0001.0.pdf?mcid=tGE4TAMA https://www.pacermonitor.com/view/NN6IJWI/Hosting_Intellect_LLC__debke-23-10531__0001.0.pdf?mcid=tGE4TAMA https://www.pacermonitor.com/view/NLKEPDI/Datagram_LLC__debke-23-10532__0001.0.pdf?mcid=tGE4TAMA List of Debtors' 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount 1. Wilmington Trust, National Bank Debt $64,678,044 Association Willkie Farr & Gallagher LLP 787 Seventh Avenue New York, NY 10019-6099 Attn: Weston T. Eguchi, Esq. Richards, Layton & Finger, P.A. One Rodney Square 920 North King Street Wilmington, DE 19801 Attn: Amanda Steele, Esq. Tel: 302-651-7838 Email: steele@rlf.com Weston T. Eguch, Esq. Tel: 212-728-8881 Email: weguch@willkie.com 2. Digital 2121 South Price, LLC Lease $7,349,400 7500 Metro Center Dr Austin, TX 78744 David Lucey Email: dlucey@digitalrealty.com 3. Dell Marketing LP Trade Debt $385,521 David Halley One Dell Way, Mail Stop 8129 Round Rock, TX 78682 Tel: (512) 728-3298 Email: David_Halley@DELL.com 4. Digital Grand Avenue, LLC Lease $378,195 7500 Metro Center Dr. Austin, TX 78744 David Lucey Email: dlucey@digitalrealty.com 5. Trace3 Inc. Trade Debt $359,516 PO Box 8474657 Los Angeles, CA 90084-7467 Cori Garcia Tel: 720-668-6484 Email: cgarcia@trace3.com 6. Unitas TSA/Trade Debt $350,000 910 W Van Buren St Suite 605 Chicago, IL 60607 Joss Wynne Evans Tel: (213) 785-6200 Email: joss.wynneevans@unitasglobal.com 7. Iron Systems Trade Debt $162,265 980 Mission Ct. Fremont, CA 94539 Tel: 408-943-8000 Email: kawal@ironsystems.com 8. International Computer Trade Debt $153,252 Concepts Inc. (ICC) 300 Wainwright Dr. Northbrook, IL 60062 Steve Osher Tel: (847) 847-3925 Email: steveo@icc-usa.com 9. Evocative TSA/Lease $723,984 EVODC-Sky Holdings, LLC W 7th Street, Suite 510 Los Angeles, CA 90017 Derek Garnier Email: derek@evocative.com 10. Nuvalo Trade Debt $131,580 14611 46th Avenue CT, NW Gig Harbor, WA 98332 Manon de Veritch Tel: 408-605-6455 Email: manon@nuvalo.com 11. Graybar Electric Company Inc. Trade Debt $125,278 PO Box 9147 Boston, MA 02205 Tel: 678-291-5200 Email: customerremit@graybar.com 12. Insight Direct USA, Inc. Trade Debt $108,941 PO Box 78825 Phoenix, AZ 85062 Marc Reynolds Tel: (480) 409-6478 Email: marc.reynolds@insight.com 13. Robert Half International Inc. Trade Debt $100,480 Bill Pisano PO Box 743295 Los Angeles, CA 90074-3295 Jenifer Mauney Tel: (925) 913-1000 Email: bill.pisano@roberthalf.com 14. Abacus Solutions Trade Debt $83,164 1190 Kennestone Circle NW Suite 120 Marietta, GA 30066 Brian Berry Tel: (770) 738-1135 Email: brian.berry@abacussolutions.com 15. Crane Electronics Group Trade Debt $81,370 16700 13th Ave W Lynnwood, WA 98037 Bob Brown Tel: (425) 743-8664 Email: bob.brown@craneae.com 16. Zerto Corp. Trade Debt $79,461 17566 Regular Mail Palatine, IL 60055 Tel: (617) 993-6331 Email: ar@zerto.com 17. King County Treasury Taxes $77,422 500 4th Avenue #600 Seattle, WA 98104 Email: PropertyTax.CustomerService@kingcounty.gov 18. KLDiscovery Ontract LLC Trade Debt $61,559 8201 Greensboro Dr Suite 300 McLean, VA 22102 Dona Fowler Email: ar@kldiscovery.com 19. Avant Communications Trade Debt $51,336 153 W Ohio Street Suite 500 Chicago, IL 60654 Johnathan Anaya Email: janaya@goavant.net 20. National Technologies (NTI) Trade Debt $47,230 Rick Chandler 5101 Thatcher Rd Downers Grove, IL 60515 Meritt Barina Tel: (630) 581-0560 Email: rchandler@ntitech.com IVS COMM: Unsecured Creditors Will Get 10% of Claims over 5 Years ----------------------------------------------------------------- IVS Comm, Inc., filed with the U.S. Bankruptcy Court for the Eastern District of Michigan a First Amended Plan of Reorganization dated April 25, 2023. The Debtor is a Michigan corporation incorporated on April 9, 2008, as "IVS Comm, Inc." which does business under its corporate name and also as "Rural Reach." Debtor's principle place of business is 1020 E. Michigan Ave., Ste. J, Saline, Michigan 48176. Debtor's business consists of providing VoiP telephone service, rural internet service provider (ISP), and IT services including physical cabling and installation of communication and internet/wireless equipment. Debtor provides services to consumers and other businesses. IVS's business is primarily focused on providing IT, ISP, and VoIP services. Debtor borrowed during the pandemic to improve services to house-bound customers, and revenue did not meet expectations for the Company's expansion. Several creditors sued IVS, taking judgments, including Breakout Capital. The trigger for the actual filing was Breakout Capital's garnishment of IVS accounts, which interrupted cash flow of IVS. This Plan of Reorganization provides for the continued operation of IVS under the existing management. IVS proposes to make monthly payments of approximately $9,500 for the maximum period of 60 months to fund the Plan of Reorganization. IVS reduced its operating expenses and continues to attempt to find cost cutting measures to maximize the monies available to support this Plan of Reorganization. Under the Plan, administrative claim will be paid in full only when approved by the Court. Secured claims will be paid in full over a period of 60 months. Funds for the payment of these claims will come from the future operations of the Debtor's business and from Debtor's cash and accounts. The Plan and funds will be administered by the Debtor's principal, Richard Marc Browning. The payments will be paid in accordance with their class, and then, within the class, paid in accordance with the applicable priority, as determined by this Plan. Class 8 consists of the claims of all unsecured creditors, if and when allowed. The holders of allowed Class 8 claims shall receive a 10% distribution on account of their allowed claims, exclusive of any post-petition interest, from the proceeds paid in by the Debtor to fund the Plan. Class 8 holders shall be paid in monthly installment payments of principal and interest, calculated at an interest rate of 6%, amortized on a 5-year schedule. Total payments to Class 8 creditors is expected to equal $79,440.44, and monthly payments in the aggregate of $1535.80. The allowed unsecured claims total $794,404.93. Debtor's business has three components of sales. IVS provides the following services: (1) Voice over Internet Protocol (VoIP); (2) rural wireless ISP services; and, (3) IT/cabling services. IVS projects that VoIP growth over the five years at 11% per year, assuming sales growth trends over the last five years. IVS projects 10% in decreasing sales in rural wireless ISP services as its customers gain access to wired ISP services due to improving ISP infrastructure. IVS projects strong growth in IT/cabling services, including construction, at approximately 20%-25% per year over the next four years, slowing down to 10% in the fifth year. A full-text copy of the First Amended Plan dated April 25, 2023 is available at https://bit.ly/3Vf0vaC from PacerMonitor.com at no charge. Debtor's Counsel: Donald Darnell, Esq. Darnell Law Office 8080 Grand St. Dexter, MI 48130 Tel: 734-424-5200 Fax: 734-786-1605 Email: dondarnell@darnell-law.com About IVS Comm IVS Comm, Inc., is a provider of cloud communication services for small to medium-sized companies that need the functionality and quality offered to large companies at an affordable cost. The company is based in Plymouth, Mich. IVS Comm sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Mich. Case No. 22-49513) on Dec. 5, 2022, with up to $1 million in assets and up to $10 million in liabilities. Richard Marc Browning, president of IVS Comm, signed the petition. Donald C. Darnell, Esq., at Darnell Law Office, is the Debtor's counsel. KCW GROUP LLC: Taps Transwestern as Real Estate Broker ------------------------------------------------------ KCW Group, LLC received approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Transwestern Property Company SW GP, LLC. The Debtor requires a real estate broker to market and sell its real property located at 6303 Beverly Hill St., Houston, Texas. The firm will be paid a commission of 4 percent of the sales price. Evelyn Ward, vice president of Transwestern, disclosed in a court filing that her firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Evelyn Ward Transwestern Property Company SW GP, LLC 1900 W Loop S #1300 Houston, TX 77027 Tel: (713) 270-3352 Email: Evelyn.Ward@transwestern.com About KCW Group KCW Group, LLC owns and operates a large facility for weddings, quincineras and other events for residents in Houston and the surrounding areas. KCW Group sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas Case No. 23-30988) on March 22, 2023, with up to $10 million in both assets and liabilities. Judge Jeffrey P. Norman oversees the case. Julie M. Koenig, Esq., at Cooper & Scully, P.C. represents the Debtor as legal counsel. KENAN ADVANTAGE: Moody's Rates New $250MM First Lien Loan 'B2' -------------------------------------------------------------- Moody's Investors Service rated Kenan Advantage Group, Inc.'s ("Kenan") proposed $250 million senior secured first lien term loan B2. Moody's also affirmed the B2 corporate family rating and B2-PD probability of default rating. Concurrently, Moody's downgraded the rating on Kenan and Kenan Canada GP's existing senior secured first lien term loan to B2 from B1. The outlook is stable. Moody's took no action on the Caa1 rating on the company's senior secured second lien term loan. Proceeds from the incremental first lien term loan and approximately $50 million in cash will be used to repay the $300 senior secured second lien term loan. Upon repayment, the senior secured second lien term loan rating of Caa1 will be withdrawn. The downgrade of the first lien term loan rating, reflects the elimination of the loss absorption within the capital structure that had been provided by the second lien term loan in a liquidation scenario under Moody's Loss Given Default for Speculative-Grade Companies methodology. The first lien term loan now represents the preponderance of the obligations in the capital structure. Downgrades: Issuer: Kenan Advantage Group, Inc. Backed Senior Secured Revolving Credit Facility, Downgraded to B2 from B1 Backed Senior Secured First Lien Term Loan B, Downgraded to B2 from B1 Issuer: Kenan Canada GP Backed Senior Secured First Lien Term Loan B1, Downgraded to B2 from B1 Assignments: Issuer: Kenan Advantage Group, Inc. Backed Senior Secured First Lien Term Loan B, Assigned B2 Affirmations: Issuer: Kenan Advantage Group, Inc. Corporate Family Rating, Affirmed B2 Probability of Default Rating, Affirmed B2-PD Outlook Actions: Issuer: Kenan Advantage Group, Inc. Outlook, Remains Stable Issuer: Kenan Canada GP Outlook, Remains Stable RATINGS RATIONALE The ratings reflect Kenan's position as a leading transportation service provider of liquid bulk products across the US and Canada. Kenan's fuel delivery operations continue to perform well due to stable fuel consumption in North America despite a slowing economy, while its liquid food business benefits from stable end-market demand. The company's competitive strength is its diversified footprint and dedicated contract carriage model that underpins its healthy margins and good liquidity. Moody's also expects increased volume in fuel delivery to be bolstered by organic growth from existing customers that will strengthen performance in 2023. Furthermore, as an operator of heavy-duty trucks with diesel engines, Kenan is exposed to the environmental risk that emission regulations will become more stringent, which could result in higher costs with the transition to electric trucks. Lastly, the company faces corporate governance risks given private equity ownership and its acquisitive nature, which could constrain the metrics if either acquisitions or shareholder dividends are funded with debt. Kenan is expected to maintain good liquidity. As of Mar. 31, 2023, the company had full availability under its $150 million revolver and cash of $36 million (pro forma for the second lien paydown). Moody's estimates Kenan will have free cash flow of over $60 million in 2023 and have a cash balance of approximately $65 million at year-end 2023. Furthermore, the refinancing is estimated to save Kenan approximately $12 million annually in cash interest expense. Moody's expects free cash flow will support acquisition funding, lessening the dependence on revolver borrowings for bolt-on acquisitions. However, Kenan's free cash flow is volatile due to seasonal working capital needs and capital expenditure requirements to modernize and expand its truck fleet. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded if the company further diversifies its revenue base away from the volatility associated with fuel delivery, while improving operating margin above 6%. Debt-to-EBITDA of around 4.0x and good liquidity would also be necessary for a ratings upgrade. The ratings could be downgraded if margins deteriorate, liquidity weakens, including declining free cash flow, and/or debt-to-EBITDA is expected to be above 5.5x. Debt funded acquisitions or shareholder returns that increase debt and leverage could also result in a downgrade. The principal methodology used in these ratings was Surface Transportation and Logistics published in December 2021. Kenan is a provider of liquid bulk transportation and logistics services to the fuels, chemicals, liquid food and merchant gas markets. Kenan offers transportation services throughout the U.S. and Canada employing a dedicated contract carriage model. Kenan is owned by OMERS Private Equity, a manager of the private equity investments of Canadian pension fund, Ontario Municipal Employees Retirement System (OMERS). Net revenue (less fuel surcharge) was about $2.0 billion as of year ended December 31, 2022. LARRET PROPERTIES: Unsecureds to be Paid in Full in 5 Years ----------------------------------------------------------- Larret Properties Unlimited, LLC and its affiliates filed with the U.S. Bankruptcy Court for the Western District of Louisiana a Joint Plan of Reorganization dated April 24, 2023. Debtors are in the business of residential, commercial, and road and bridge construction. Thomas Kendal Terral and Kahla D. Terral are married Debtors, and own 100% of the membership interests in Larret Properties Unlimited, LLC and Terral Construction, LLC; and own 100% of the stock in D'Arbonne Construction Company, Inc. These Chapter 11 cases were necessitated by the Peoples Bank debt. Moreover, the title to a tract of land owned by Larret Properties Unlimited, LLC, was clouded due to drainage-related litigation with the adjacent landowners, such that refinance was not possible. Though the Debtors dispute the amount of the Peoples Bank claim, the bank has pursued executory process, and had a sheriff's sale of immovable property scheduled by the Union Parish Sheriff for January 25, 2023. In the months leading to the bankruptcy filings, as a result of the factors Debtors were cash-strapped and had difficulty satisfying amounts due to Peoples Bank. The filing of these bankruptcy cases allowed Debtors to plan and prepare for a sale process which is anticipated to resolve, in full, the secured debts. Class 3 consists of General Unsecured Claims. The only known claimants in this class and their recognized claim amounts are: Advanced Cardiovascular Specialist: $115.19; Bienville Med Center: $50.00; Capital One: $1,272.66; Century Ready-Mix: $87,350.32; Credit Collection Services: $330.00; Discover: $8,180.98; Green Clinic, LLC: $251.51; Green Clinic, LLC: $335.36; Jefferson Capital Systems, LLC: $1,210.53; LA Department of Revenue (ending 2281): $66.11; and LA Department of Revenue (ending 0945): $1,367.50. The Class 3 General Unsecured Claims will be paid in full and without interest over a period of 5 years from the Effective Date, with Cash payments to be made on a quarterly basis beginning August 1, 2023. At the option of the Reorganized Debtors, the Class 3 General Unsecured Claims may be satisfied before August 1, 2023, in the amounts as stated, from the Plan Implementation Funding. Class 3 is impaired under the Plan. Class 4 is composed of Thomas Kendal Terral and Kahla D. Terral in their capacities as members and stockholders of the Debtor entities. Class 4 shall retain their Equity Interests after the Effective Date of the Plan. Class 4 is not impaired under the Plan and shall be deemed to accept the Plan. The Plan will be funded primarily from the proceeds of the following: * A sale to Entergy of land held by T & R Investments, Inc. or Terral Industries, Inc. (the "Land Sale"), in which entities Thomas Kendal Terral and his two siblings each own a 1/3 interest. It is anticipated that Entergy will offer $4.65M for the land for use as a solar farm. The Land Sale is expected to net each sibling $1.2M after taxes. * A sale of timber (the "Timber Sale") from the land being sold in the Land Sale. The Timber Sale is expected to yield approximately $500,000. The proceeds of the Timber Sale are subject to the same 1/3 division. * Homeland Federal Savings Bank is considering funding for the development of a convenience store on the land owned by Larret Properties and Thomas Kendal Terral. The proposed development would include an owner-occupied pharmacy which is expected to generate approximately $4M in gross revenue with a 35% gross profit percentage. Terral Construction will construct the improvements. All projected disposable income of the Debtors to be received in a three-year period, or such longer period as the court may approve but not to exceed five years, will be applied to the Plan. Proceeds received from all Claims and Causes of Action asserted on behalf of the Debtors or Reorganized Debtors will be applied to satisfy Allowed Claims in accordance with the classification system and treatment in this Plan. A full-text copy of the Joint Plan dated April 24, 2023 is available at https://bit.ly/41MShsW from PacerMonitor.com at no charge. Attorneys for Debtors: Bradley L. Drell, Esq. Heather M. Mathews, Esq. Gold Weems Bruser Sues & Rundell, APLC P.O. Box 6118 Alexandria, LA 71307-6118 Tel: (318) 445-6471 Fax: (318) 445-6476 Email: bdrell@goldweems.com About Larret Properties Unlimited Larret Properties Unlimited, LLC, and its affiliates, Terral Construction, LLC and D'Arbonne Construction Company, Inc., filed voluntary petitions for Chapter 11 protection (Bankr. W.D. La. Lead Case No. 23-30074) on Jan. 24, 2023. Thomas R. Willson has been appointed as Subchapter V trustee. At the time of the filing, Larret reported $1,005,000 in assets and $1,003,287 in liabilities. Judge John S. Hodge oversees the cases. The Debtors tapped Bradley L. Drell, Esq., at Gold Weems Bruser Sues & Rundell, APLC as legal counsel and Chad M. Garland, CPA, LLC as accountant. LEARFIELD COMMUNICATIONS: $864M Bank Debt Trades at 26% Discount ---------------------------------------------------------------- Participations in a syndicated loan under which Learfield Communications LLC is a borrower were trading in the secondary market around 74.4 cents-on-the-dollar during the week ended Friday, April 28, 2023, according to Bloomberg's Evaluated Pricing service data. The $864 million facility is a Term loan that is scheduled to mature on December 1, 2023. About $862 million of the loan is withdrawn and outstanding. Learfield Communications, LLC, dba Learfield IMG College, is an operator in the collegiate sports multimedia rights and marketing industry. Atairos Group, Inc. acquired the company in December 2016 from Providence Equity Partners, Nant Capital, and certain members of management. LIFESCAN GLOBAL: S&P Downgrades ICR to 'CC', Outlook Negative ------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on blood glucose monitoring (BGM) devices manufacturer LifeScan Global Corp. to 'CC' from 'CCC+'. In addition, S&P lowered its ratings on the company's second-lien term loans to 'C' from 'CCC'. S&P's rating on the company's super-priority cash flow revolver remains 'B', and rating on the fist-lien term loan remains 'CCC+'. S&P said, "The negative outlook reflects our expectation that we will lower our issuer credit rating on the company to 'SD' (selective default) and the second-lien term loan rating to 'D' (default) upon the completion of the proposed exchange offer. Shortly after restructuring, we would raise the ratings to a level that reflects the ongoing risk of a conventional default or future distressed restructurings. "The downgrade follows LifeScan's announcement of its intent to engage in a debt exchange offer, which we view as distressed .On April 25, 2023, LifeScan announced to its lenders an exchange offer on its super-priority revolver, first-lien, and second-lien term loans. The exchange offer will extend the maturities of the revolving credit facility, first- and second-lien term loans by two years. All consenting lenders will receive a 50 basis points (bps) consent fee. The compensation for the revolver and the first-lien term loan holders will also include an increase of the interest rate spread by 50 bps and partial repayment of $12.5 million and $37.5 million, respectively, through a sponsor equity contribution of $50 million." The second-lien term loan will not receive incremental interest, and the principal will remain at $275 million. Additionally, there will be a payment-in-kind component subject to net first-lien leverage added to the second-lien loans as part of the amendment, indicating an additional deterioration in terms versus the original issuance. S&P said, "We view the proposed second-lien exchange as tantamount to default because second-lien lenders are receiving less than the original promise, with no sufficient compensation. We would thus expect to lower our issuer credit on the company to 'SD' (selective default) and the rating on the second-lien term loan to 'D' immediately following the completion of the transaction." The debt burden is significant, but the proposed transaction should provide the company time to launch its CGM product.The company is working toward launching its constant glucose monitoring (CGM) product launch later in 2023 or in 2024, which should be a significant development given the glucose monitoring market transition to CGM in the recent years. S&P said, "However, we continue to see risks that if the launch of the CGM product is further delayed, we believe could be detrimental to the company's prospects to gain share from already existing CGM products, as the two main competitors in the CGM space, Abbott Laboratories and Dexcom Inc., continue to establish themselves in the market with new versions of their CGM products. Although the company was successful in its cost-restructuring execution, we project that the continued decline in sales and the required investments in CGM development may result in the company's free cash flow remaining under $100 million, and its liquidity will remain less than adequate under the proposed exchange terms. "The negative outlook reflects our expectation that we will lower our issuer credit rating on LifeScan to 'SD' and our rating on its second-lien term loan to 'D' after the transaction closes. Shortly after restructuring, we would raise the ratings to a level that reflects the ongoing risk of a conventional default or future distressed restructurings." ESG credit indicators: E-2, S-2, G-3 LMBE-MC HOLDCO II: Moody's Reviews B1 Rating on Secured Loans ------------------------------------------------------------- Moody's Investors Service placed LMBE-MC Holdco II, LLC's senior secured credit facilities rated B1 under review for possible upgrade. The rating action is driven by Talen Energy Supply, LLC's (Talen: B1 Corporate Family Rating), LMBE-MC Holdco's indirect owner, plan to emerge from bankruptcy next month and the associated improvement in Talen's credit quality post-emergence. Talen sought bankruptcy protection in May 2022 and is expected to emerge in mid-May 2023 with a newly restructured capital structure. The rating outlook has changed to Rating Under Review from negative. The review for possible upgrade will consider LMBE-MC Holdco's strategy as part of a more streamlined Talen corporate family, including whether existing ring fencing provisions will prospectively remain in place and the manner in which the project plans to address its expiring $25 million senior secured credit facility. The review will also examine the issuer's hedging strategy along with its ability to maintain strong financial metrics and continued debt repayment in light of lower regional capacity and commodity price levels. RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS LMBE-MC Holdco's B1 credit profile recognizes the issuer's consistent standalone financial performance. Specifically, its debt-to-EBITDA has remained at less than 4.5 times since 2019 while internal cash flow during the nine months ending September 30, 2022 was sufficient to reduce term loan borrowings by approximately $33 million. Term loan debt outstanding at September 30, 2022 was approximately $320 million compared to $450 million when the 7-year term loan closed in December 2018. The rating could be upgraded if separateness provisions remain largely intact and if financial performance is to maintained or strengthened owing to continuing declining debt balances in light of lower regional capacity and commodity price levels. In light of the rating review, the rating is unlikely to be downgraded. The rating could be downgraded should Moody's expect LMBE-MC's standalone financial performance or liquidity profile to weaken materially over the next several years. LMBE-MC owns two gas-fired electric generating facilities located in Bangor, Pennsylvania: the two-unit 1,700-megawatt Martins Creek power plant (Units 3&4) and the 600-megawatt Lower Mt. Bethel power plant. LMBE-MC is 100% owned by Talen. The principal methodology used in these ratings was Power Generation Projects Methodology published in January 2022. MATLINPATTERSON GLOBAL: U.S. Trustee Says Disclosures Inadequate ---------------------------------------------------------------- William K. Harrington, the United States Trustee for Region 2, objects to the motion of MatlinPatterson Global Opportunities Partners II L.P., et al., seeking conditional approval of the Debtors' First Amended Disclosure Statement for the Second Amended Joint Chapter 11 Plan of Liquidation. The United States Trustee claims that Disclosure Statement fails to provide adequate information justifying the non-consensual non debtor releases that will be imposed under the Plan through the Opt-out procedure. As Judge Wiles discussed in Chassix, creditors whose rights do not simply pass through the bankruptcy process are not truly unimpaired. Accordingly, these classes should be provided with a Notice of Non-Voting status with the ability to Opt-in to Third-Party Releases rather than the proposed Notice requiring an election to Opt-out of Third-Party Releases. The United States Trustee points out that the Disclosure Statement does not include information about the Debtors background, pre-petition business activities, corporate structure (other than attaching a corporate organization chart) or reasons for filing for bankruptcy, but instead cross references the Debtors' first day declaration. The United States Trustee contends that before seeking to impose the Third-Party Releases on unsecured creditors and interest holders, the Debtors must amend the Plan and Disclosure Statement to provide an adequate procedure for those parties to demonstrate their actual affirmative consent to such proposed releases. In the absence of such procedures, the Court cannot make the finding the Plan requires with respect to the Third-Party Releases, and the Plan will be unconfirmable. The United States Trustee asserts that the Debtors' exculpation provision in the Plan is inappropriate because the definition of exculpated party is overly broad. Based on the particular facts and circumstances of this case, the United States Trustee's objections here are: (a) to the inclusion of parties that are nonfiduciaries, (b) the exculpation provision does not allow for claims based on attorneys' violation of New York Rules of Professional Conduct, and (c) the extension of the exculpation outside the period from the Petition Date to the Effective Date of the Plan. Furthermore, in addition to excepting willful misconduct, gross negligence, or fraud, the exculpation should also except attorneys' violation of New York Rules of Professional Conduct. The Plan, as written, runs afoul of the NYRPC provision that restricts attorneys from making agreements limiting their liability to a client for malpractice. Moreover, the exculpation provision does not currently provide any carveout for criminal conduct, nor is there any government carve-out. The United States Trustee objects to the extent the exculpation shields Exculpated Parties who rely upon the advice of counsel. While such reliance may be raised as an affirmative defense, it should not serve as an absolute bar against liability. Exculpated Parties should have a claim against their legal advisors for improper or mistaken advice, and the exculpation should not extend any protection for such advice. A copy of the United States Trustee's objection dated April 25, 2023, is available at https://bit.ly/3ACmFdp from kccllc.net, the claims agent. About MatlinPatterson Global MatlinPatterson Global Opportunities Partners II L.P. is a private investment fund structured as limited partnership entity organized in the State of Delaware. MatlinPatterson and its affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No 21-11255) on July 6, 2021, disclosing total assets of $100 million to $500 million and total liabilities of $10 million to $50 million. The cases are handled by Judge David S. Jones. The Debtors tapped Simpson Thacher & Bartlett, LLP as bankruptcy counsel; Schulte Roth & Zabel, LLP as conflicts counsel; FTS US Inc. as tax consultant; Ernst & Young, LLP as tax services provider; and North Country Capital LLC as restructuring advisor. Matthew Doheny of North Country Capital serves as the Debtors' chief restructuring officer. Kurtzman Carson Consultants, LLC is the claims, noticing and administrative agent. MERIDIAN HOLDING: Continued Operations to Fund Plan --------------------------------------------------- Meridian Holding Group, LLC filed with the U.S. Bankruptcy Court for the Middle District of Florida a Plan of Reorganization dated April 25, 2023. The Debtor is an investment company engaged in the commercial business activity of acquiring two businesses, Webster Electric Co., LLC and Webco Leasing & Supply, LLC (together, the "Subsidiaries") from the Websters. The Debtor filed the instant case to preserve the value of its business operations, consolidate its various lawsuits, restructure its debt obligations, and ultimately allow for a successful reorganization for all stakeholders. The actions of Assurance have put the Subsidiaries at grave risk of disaster. The Debtor brings this Plan forward in an attempt to pay all parties in full and end all litigation, despite all efforts to prevent it from doing so. Class 1 consists of the Secured Claim of Webster Acquisition Holdings, LLC, as successor to Assurance Mezzanine Fund, III, LP. All defaults under the Assurance Transaction Documents to this creditor shall be cured on the Effective Date and the full payments, together with reporting requirements, post-closing requirements, covenant compliance tests and other obligations will be resumed to this creditor under the original terms and conditions set forth in the Assurance Transaction Documents, with the following exceptions: * The Fixed Charge Coverage Ratio set forth in Section 5.12(a) of the Note and Warrant Purchase Agreement shall be amended to (a) exclude past-due Redemption Payments to the Websters together with interest; (b) exclude tax distributions for past due taxes, together with interest and penalties (if any); and (c) the Cure Period for the Fixed Charge Coverage Ratio be extended to the fiscal month ending 12 months from the month of confirmation of the Plan; * The Cure Period for the prohibition against Excess Capital Expenditures set forth in Section 6.5 of the Note and Warrant Purchase Agreement be extended to the fiscal month ending December 31, 2023. * The Cure Period for the requirement for Directors and Officers Insurance set forth in Section 5.9(iii) of the Note and Warrant Purchase Agreement be extended to the fiscal month ending December 31, 2023. * The Cure Period for the requirement that taxes be current as set forth in Section 5.3 and Section 6.6 of the Note and Warrant Purchase Agreement be extended, with respect to tax arrears incurred while the Debtor was not in control of WHG and the Subsidiaries, to the Assurance Maturity Date of June 28, 2024. Class 2 consists of all Allowed General Unsecured Claims against the Debtor. These creditors shall release all claims against the Debtor in exchange for an Indemnity, Assignment and Assumption Agreement made to these Holders by Providence Group, LP, which shall assume all of these Allowed General Unsecured Claims. Class 2 is Impaired. Class 3 consists of all equity interests in Meridian Holding Group, LLC. The Interests of Class 3 Interest Holders shall be cancelled on the Effective Date and be issued interests in the Reorganized Debtor in the same proportions such Interests were held in the Debtor as of the Petition Date. Class 3 is impaired. The property of the Debtor's bankruptcy estate includes all its property. Though the actions by Assurance divested the Debtor of control over WHG, the Debtor remains the owner of 100% of the common interests of WHG. Accordingly, the Debtor has owned and continues to own the Subsidiaries. The change of control effected by Webster and Assurance did not change the ownership or equity interests of the Debtor in the property that it purchased. The Plan simply returns to the Debtor the control over its assets. The return of control to the Debtor is in the best interests of the estate. The Debtor shall be merged into WHG on the Effective Date to create the Reorganized Debtor, and a new holding company shall be established to hold the WHG and WREHG interests. The Reorganized Debtor shall provide Assurance with the same rights as the Debtor, and it shall act as substitute Pledgor to Assurance of its equity interests in WHG and WREHG on terms and conditions substantially identical to those set forth in the Pledge Agreement executed by the Debtor. With the restoration of the authority needed to obtain a bonding facility, a line of credit, and a management team for the Subsidiaries (which are essential for the survival of the Reorganized Debtor and the Subsidiaries) that the Plan will make possible, the Reorganized Debtor will be able to make all payments under the Plan through the operations of the Reorganized Debtor and its Subsidiaries, as well as tax distributions and distributions to pay Allowed General Unsecured Claims, while preserving the jobs and the livelihood of approximately 75 employees of the Subsidiaries. A full-text copy of the Plan of Reorganization dated April 25, 2023 is available at https://bit.ly/42aaAbo from PacerMonitor.com at no charge. Attorneys for Debtor: Frank M. Wolff, Esq. Frank M Wolff Law, P.A. P.O. Box 850 Oakland, FL 34760 Tel: (407) 701 9109 Email: frankmwolff@gmail.com About Meridian Holding Group Meridian Holding Group, LLC is an investment company engaged in the commercial business activity of acquiring two businesses, Webster Electric Co., LLC and Webco Leasing & Supply, LLC (together, the "Subsidiaries"). The Debtor its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-00388) on Jan. 31, 2023. The petition was signed by Robert Manners as manager. At the time of filing, the Debtor estimated $10 million to $50 million in assets and $1 million to $10 million in liabilities. Frank Wolff, Esq. at the law firm of Frank M. Wolff Law, P.A. represents the Debtor as counsel. MERIDIEN ENERGY: Seeks $1.6MM DIP Loan from ICT-DIP --------------------------------------------------- Meridien Energy, LLC asks the U.S. Bankruptcy Court for the Eastern District of Virginia, Richmond Division, for authority to use cash collateral and obtain postpetition financing. The Debtor requires immediate access to incremental liquidity in the form of postpetition financing and access to cash collateral. Meridien Energy contends relief is critical to preserving and maximizing the value of the Debtor's estate. The Debtor commenced the Chapter 11 Case with firm commitments for $1.6 million delayed-draw term loan facility to be provided by ICT-DIP LLC, to support the Debtor's business. The DIP facility matures through the earliest to occur of (a) September 4, 2023, (b) the effective date of a confirmed Acceptable Plan, and (c) the date of acceleration of the Loans or termination of the Commitment by the DIP Lender following an Event of Default. The Debtor agrees to comply with these milestones: (a) On or before the third Business Day after the Petition Date, the Interim DIP Order will have been entered, and such order will not have been reversed, modified, amended, stayed or vacated; (b) On or before the 30th day after the entry of the Interim DIP Order, the Final DIP Order will have been entered, and such order will not have been reversed, modified, amended, stayed or vacated; (c) On or before July 3, 2023, the Borrower will have filed with the Bankruptcy Court an Acceptable Plan and Disclosure Statement; (d) on or before July 6, 2023, the Borrower will have sourced supplemental cash flow either from operations, assets or otherwise in an amount of no less than $350,000; (e) On or before August 2, 2023, the Disclosure Statement Order will have been entered; (f) On or before August 31, 2023, the Confirmation Order will have been entered; and (g) On or before September 4, 2023, an Acceptable Plan will have been substantially consummated. In December 2017, MarkWest Liberty Midstream & Resources, LLC solicited bids from pipeline construction contractors for a project to construct a natural gas pipeline in West Virginia. The Debtor bid on the project and, on February 27, 2018, MarkWest selected the Debtor to construct certain segments of the pipeline. Thereafter, the Debtor and MarkWest entered into the Pipeline Construction Contract for the Project on March 9, 2018. The total price to be paid to the Debtor under the Contract was $34.820 million. From the outset of the Contract, MarkWest delayed the Debtor's performance of the Project. For example, the Contract provided for a specific construction commencement date of March 28, 2018. Accordingly, the Debtor had its equipment and employees ready to begin work on the specified commencement date. The Debtor also had turned down other work during this time period in order to allocate the necessary time and resources to the Project. However, MarkWest delayed the start date and failed to provide a notification to proceed until almost a month later on April 25, 2018. During that time, the Debtor's equipment and employees sat idle and the Debtor was unable to perform any work for other projects in the interim, which caused the Debtor to incur and pay substantial amounts to its employees and subcontractors. Further, Mark West failed to obtain access to the right-of way and access roads from several landowners between June 29, 2018 and August 8, 2018. This delay cost the Debtor more than $6 million in resulting cash outlays. Ultimately, a dispute arose between the parties concerning the substantial delays and suspensions in the work caused by MarkWest. These delays and suspensions of the Project were the result of, among other things, major flaws and omissions in the bid documents, misinformation that MarkWest provided to the Debtor, and MarkWest's failure to obtain permits, and access right-of ways and from landowners. Despite the fact of the Debtor's substantial performance of the Project, on October 16, 2018, MarkWest wrongfully terminated the Contract in a bad faith attempt to avoid paying the Debtor the millions of dollars in contractual delay damages caused by MarkWest's negligence in the design, planning and management of the Project. Although the Contract required that MarkWest reimburse the Debtor for any delay in the completion of the Project that were caused by the acts and omissions of MarkWest, it refused to do so. Additionally, MarkWest failed to pay the Debtor for the work it had completed on the Project. In total, the Debtor suffered more than $30 million in damages as a result of the negligent acts and omissions of MarkWest and its wrongful termination of the Contract. A substantial portion of those damages related to actual cash outlays by the Debtor to its employees, subcontractors, materials, and other related expenditures. On November 16, 2018, MarkWest filed suit against the Debtor in the District Court for the City and County of Denver, Colorado. The Debtor filed counterclaims against MarkWest in the Litigation for, among other things, breach of the Contract and unjust enrichment. Due to the circumstances of the COVID-19 pandemic, the trial in the Litigation was postponed to October 18, 2021. At the conclusion of the trial, the jury awarded $16 million in damages to MarkWest and $1.510 million in damages to the Debtor. The Colorado Court thereafter decided the Debtor's counterclaim for unjust enrichment and, on May 5, 2022, found in favor of Meridien. On December 7, 2022, the Colorado Court entered judgment in the Litigation, which judgment provided a net award of damages in favor of MarkWest in the amount of $13.283 billion. The Debtor disputes the Judgment and on January 25, 2023, the Debtor appealed the Judgment, which appeal is pending in the Colorado Court of Appeals. MarkWest also appealed the Judgment as it related to the relief granted the Debtor. The costs and burdens of the Project termination and Litigation have been a significant drain on the Debtor's resources. In addition to the loss of $30 million, the Debtor expended millions in connection with the Litigation, and was compelled to pass on other opportunities. Compounding these difficulties, the Debtor suffered additional financial strain during this time period as a consequence of the COVID-19 pandemic, including cancelled projects, increased operating expenses, and labor shortages. In sum, the combination of the cost associated with the Mark West litigation and the cloud of uncertainty surrounding that Litigation for the past four years has severely impaired the Debtor's ability to bid contracts and by extension its operations as a whole. As of the Petition Date, the Debtor had approximately $19.5 million in total debt obligations, inclusive of the disputed Judgment. Approximately $5.2 million of that debt is secured by substantially all of the Debtor's assets. The Debtor is indebted to Bank7 Corporation pursuant to the Promissory Note in the principal amount of $3.966 million, dated November 15, 2020 and the Commercial Security Agreement, dated November 15, 2020. Pursuant to an Extension Agreement between the parties dated February 9, 2023, the maturity date of the Bank7 Note was extended to February 15, 2024, and the Debtor agreed to pay Bank7 a principal payment in the amount of $500,000 on August 15, 2023, and quarterly payments of accrued interest commencing on May 15, 2023. Additionally, the Debtor is indebted to William C. Schettine in the amount of approximately $1.160 million pursuant to the Third Amended and Restated Line of Credit Secured Demand Promissory Note, dated March 30, 2023 and the Security Agreement, dated January 3, 2023. While the Debtor does not believe it is diminishing the Prepetition Secured Lenders interest in cash collateral, the Debtor proposes to provide the Prepetition Secured Lenders with a variety of forms of adequate protection to protect against the post-petition diminution in value of their collateral, including cash collateral. Specifically, the Debtor seeks to provide adequate protection to the Prepetition Secured Lenders: -- Bank7 will receive: (i) the Bank7 Replacement Liens; (ii) the Bank7 Superpriority Claims; and (iii) payment of the Bank7 Payments. -- WCS will receive: (i) WCS Replacement Liens; and (ii) the WCS Superpriority Claims. A copy of the motion is available at https://bit.ly/40JV84z from PacerMonitor.com. About Meridien Energy, LLC Meridien Energy, LLC is a full-service pipeline construction company headquartered in New York state with division offices in Pennsylvania, Virginia, and Florida. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Va. Case No. 23-31377) on April 20, 2023. In the petition signed by John W. Teitz, chief restructuring officer, the Debtor disclosed up to $10 million in assets and up to $50 million in liabilities. Brandy M. Rapp, Esq., at Whiteford, Taylor and Preston, LLP, represents the Debtor as legal counsel. MERISOL VILLAGES: June 5 Plan & Disclosure Hearing Set ------------------------------------------------------ Merisol Villages, LLC, filed with the U.S. Bankruptcy Court for the Southern District of Texas a Second Amended Disclosure Statement for Amended Plan of Reorganization. On April 25, 2023, Judge David R. Jones conditionally approved the Disclosure Statement and ordered that: * May 31, 2023, at 12:00 noon is the deadline for filing ballots accepting or rejecting the Plan. * May 31, 2023, at 12:00 noon is the deadline for filing and serving written objections to confirmation of the Plan or final approval of the Disclosure Statement. * June 5, 2023, at 2:00 p.m. in Courtroom 400, 4th Floor, United States Courthouse, 515 Rusk, Houston, Texas 77002 is the evidentiary hearing to consider final approval of the Disclosure Statement and confirmation of the Plan. A copy of the order dated April 25, 2023 is available at https://bit.ly/3AB8yoK from PacerMonitor.com at no charge. Attorneys for the Debtor: Raymond W. Battaglia, Esq. Law Offices of Ray Battaglia, PLLC 66 Granburg Circle San Antonio, TX 78218 Telephone: (210) 601-9405 Email: rbattaglialaw@outlook.com About Merisol Villages Merisol Villages, LLC, is a single asset real estate debtor (as defined in 11 U.S.C. Section 101(51B)). It is the fee simple owner of 25.559 acres located in Port Aransas, Texas, valued at $9.62 million. Merisol Villages sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Case No. 22-20135) on May 31, 2022. In the petition filed by Charles J. Castor, Jr., sole member, the Debtor listed assets and liabilities between $1 million and $10 million. Judge David R. Jones oversees the case. Raymond Battaglia, Esq., at the Law Offices of Ray Battaglia, PLLC is the Debtor's counsel. MIAMI JET TOURS: Unsecureds Will Get 2.58% of Claims in 5 Years --------------------------------------------------------------- Miami Jet Tours, Inc., filed with the U.S. Bankruptcy Court for the Southern District of Florida a Plan of Reorganization dated April 25, 2023. The Debtor is a transportation company, specializing in private transportation for small and large groups, pre and post cruise transfers, corporate and sporting events, concerts, school trips, churches, weddings and customized transportation needs. The Debtor's business was severely impacted by the COVID-19 pandemic, as its business is largely dependent on the hospitality industry. Prior to the pandemic, the Debtor owned 12 tour buses. The majority of those tour buses were either repossessed or returned, resulting in large potential deficiency obligation(s) owed to the various secured lenders on those tour buses. These obligation(s) led to lawsuit(s) being filed against the Debtor. The Debtor is currently operating with 4 tour buses. The Debtor also provides services to its customers in contracting with other owner(s) of tour bus(es) and derives income from such commissions. Creditors have filed claims in this bankruptcy proceeding totaling $2,905,367.83. After deducting claims that the Debtor believes are objectionable, and after reclassifying certain claims to priority and/or secured status, the Debtor estimates that the total amount of allowed general unsecured claims is $2,322,904.30. By this Plan, the Debtor will be restructuring these obligations, such that the Debtor can remain viable as a going concern. The Debtor's financial projections show that the Debtor will have projected disposable income (after payment of all amounts under this Plan, as well as all operating expenses) of $35,662.00. The final Plan payment is expected to be paid on June 30, 2028. This Plan provides for 1 class of priority claims, 6 classes of secured claims, 1 class of general unsecured claims and 1 class of equity security holders. General unsecured creditors holding allowed claims will receive distributions, which the Debtor has valued at approximately 2.5830 cents on the dollar. This Plan also provides for the payment of administrative and priority claims. Class 8 consists of General Unsecured Creditors. Total estimated Allowed General Unsecured Claims are $2,322,904.30. Class 8 consists of all allowed general unsecured claims, including any undersecured claims. The Class 8 Creditors shall share pro rata in a total distribution in the amount of $60,000.00. Any allowed general unsecured claimant scheduled to receive a total distribution of $500.00 or less shall be paid in a lump sum on the First Payment Date. The Debtor estimates that the lump sum payment(s) will total $174.62. Any allowed general unsecured claimants scheduled to receive a total distribution of more than $500.00 shall receive payment over 5 years (60 months), in 20 quarterly payments totaling $2,985.45 per payment, with the first payment due on the First Payment Date and continuing on the first day of every quarter (i.e. every three months from the First Payment Date) thereafter. Unsecured creditors will be receiving a distribution of approximately 2.5830% of their allowed claim(s), which is an amount in excess of what claimants would receive in a hypothetical Chapter 7 proceeding, in which case such claimants would receive 0.00%. Class 9 consists of all allowed equity interests in the Debtor, which includes interest in any share of preferred stock, common stock or other instruments evidencing an ownership interest in the Debtor. All Equity Security Holders of the Debtor will retain their interest(s) in the Debtor as such interest(s) existed prior to the Petition Date, with Rafael Mulkay retaining a 100% stock interest. The means necessary for the implementation of this Plan include the Debtor's cash flow from operations for a period of 5 years. The Debtor's financial projections show that the Debtor will have sufficient cash over the life of the Plan to make the required Plan payments and operate its business. The estimated cash on hand necessary as of the First Payment Date of this Plan is $100,000.00. A full-text copy of the Plan of Reorganization dated April 25, 2023 is available at https://bit.ly/40R1rTM from PacerMonitor.com at no charge. Attorneys for the Debtor: Zach B. Shelomith, Esq. Leiderman Shelomith Alexander + Somodevilla, PLLC 2699 Stirling Road, Suite C401 Ft. Lauderdale, FL 33312 Tel: (954) 920-5355 Fax: (954) 920-5371 Email: zbs@lss.law About Miami Jet Tours Miami Jet Tours, Inc. is a Miami transportation company specializing in private transportation for small and large groups; pre and post cruise transfers, corporate and sporting events, concerts, school trips, churches, weddings, and customized transportation needs. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-10569) on January 25, 2023. In the petition signed by Rafael Mulkay, president, the Debtor disclosed up to $1 million in assets and up to $10 million in liabilities. Judge Robert A. Mark oversees the case. Zach B. Shelomith, Esq., at LSS Law, represents the Debtor as legal counsel. MONITRONICS INT'L: Mulls 2nd Bankruptcy to Hand Control to Lenders ------------------------------------------------------------------ Reshmi Basu of Bloomberg News reports that Monitronics International Inc. is weighing a bankruptcy filing that would hand lenders control of the home security and alarm company, according to people with knowledge of the matter. The company, which operates as Brinks Home Security, is finalizing a restructuring agreement with lenders and may file for Chapter 11 protection in the coming days, said the people, who asked not to be identified because the matter is private. Discussions are ongoing and plans could change, the people added. Monitronics and its lenders have been in talks on how to address a March 2024 loan maturity, Bloomberg previously reported. About Monitornics International Farmers Branch, Texas-based Monitronics International, Inc. (doing business as Brinks Home) is an American company that offers home security systems. * * * In mid-April 2023, S&P Global Ratings lowered its issuer credit rating on U.S. alarm monitoring company Monitronics International Inc.'s (d/b/a Brinks Home Security) to 'CCC' from 'CCC+'. At the same time, S&P lowered its issue-level rating on the company's $822.5 million takeback term loan to 'CCC' from 'CCC+'. The recovery rating on this debt remains '3'. The negative outlook reflects that S&P could lower the rating within the next 12 months if it believes a default is imminent. The downgrade reflects Brinks Home's nearing term loan maturities, increasing the risk of a default in the next 12 months. The company's debt consists of a $145 million super-priority revolving credit facility due July 2024 (not rated; $95.5 million drawn as of Dec. 31, 2022), a $150 million super-priority term loan due July 2024 (not rated), and an $822.5 million takeback senior secured term loan facility maturing in March 2024. The super-priority facility is subject to a springing maturity of 91 days prior to the maturity of the takeback senior secured term loan facility if the debt remains outstanding at that time. S&P said, "Though we expect the company's trajectory of steadily improving operating metrics (subscriber acquisition cost efficiency, attrition rates) in 2022 will continue into 2023, we forecast Brinks Home will continue to have free operating cash flow (FOCF) deficits. This could make it challenging for the company to extend its maturities on satisfactory terms, particularly in a high interest rate and volatile market climate. MONTANA TUNNELS: Exclusivity Period Extended to June 5 ------------------------------------------------------ Judge Benjamin P. Hursh of the U.S. Bankruptcy Court for the District of Montana extended Montana Tunnels Mining, Inc.'s exclusivity period to file its chapter 11 plan and disclosure staement to June 5, 2023. Montana Tunnels Mining, Inc. is represented by: James A. Patten, Esq. Molly S. Considine, Esq. PATTEN, PETERMAN, BEKKEDAHL & GREEN, P.L.L.C. 2817 Second Ave. North, Suite 300 Billings, MT 59103-1239 Tel: (406) 252-8500 Email: apatten@ppbglaw.com mconsidine@ppbglaw.com About Montana Tunnels Mining Montana Tunnels Mining, Inc., a company in Jefferson City, Mont., sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Mont. Case No. 22-20132) on Dec. 2, 2022. In the petition signed by its chief executive officer, Patrick Imeson, the Debtor disclosed $10 million to $50 million in assets and $50 million to $100 million in liabilities. Judge Benjamin P. Hursh oversees the case. Patten, Peterman, Bekkedahl & Green, PLLC and Crowley Fleck, PLLP serve as the Debtor's bankruptcy counsel and special counsel, respectively. NABIEKIM ENTERPRISES: Gets OK to Hire Fear Waddell as Legal Counsel ------------------------------------------------------------------- Nabiekim Enterprises, Inc. received approval from the U.S. Bankruptcy Court for the Eastern District of California to employ Fear Waddell, P.C. as its legal counsel. The firm's services include: a. consulting with the Debtor concerning its present financial situation and realistic achievable goals; b. advising the Debtor concerning its duties in a Chapter 11 Subchapter V case; c. identifying, prosecuting and defending claims and causes of actions assertable by or against the Debtor's estate; d. preparing legal papers including the formulation of a Chapter 11 Subchapter V plan, drafting the plan, and prosecuting legal proceedings to seek confirmation of the plan; e. preparing and prosecuting such pleadings as complaints to avoid preferential transfers or transfers deemed fraudulent as to creditors, motions for authority to borrow money, sell property or compromise claims, and objections to claims; and f. taking all necessary action to protect and preserve the estate. The firm received pre-bankruptcy retainers in the total amount of $20,000. Peter Fear, Esq., a partner at Fear Waddell, 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: Peter L. Fear, Esq. Gabriel J. Waddell, Esq. Peter A. Sauer, Esq. Fear Waddell, P.C. 7650 North Palm Avenue, Suite 101 Fresno, CA 93711 Telephone: (559) 436-6575 Facsimile: (559) 436-6580 Email: pfear@fearlaw.com gwaddell@fearlaw.com psauer@fearlaw.com About Nabiekim Enterprises Nabiekim Enterprises, Inc. operates a Korean Fusion restaurant in Fresno, Calif. NabieKim filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. E.D. Calif. Case No. 23-10571) on March 24, 2023, with $50,000 to $100,000 in assets and $1 million to $10 million in liabilities. David Sousa has been appointed as Subchapter V trustee. Judge Jennifer E. Niemann oversees the case. Fear Waddell, P.C. is the Debtor's legal counsel. NEW HAVEN TRUCK: Case Summary & 11 Unsecured Creditors ------------------------------------------------------ Debtor: New Haven Truck and Auto Body, Inc. 480 Short Beach Road East Haven, CT 06512 Business Description: New Haven Truck is a complete vehicle collision and body repair shop located in East Haven, Conneticut. Chapter 11 Petition Date: April 28, 2023 Court: United States Bankruptcy Court District of Connecticut Case No.: 23-30298 Debtor's Counsel: Stuart H. Caplan, Esq. LAW OFFICES OF NEIL CRANE, LLC 2679 Whitney Avenue Hamden, CT 06518 Tel: 203-230-2233 Fax: 203-230-8484 Email: stuart@neilcranelaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by William S. Snow, Jr. as president. A full-text copy of the petition containing, among other items, a list of the Debtor's 11 unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/UGM4FVQ/New_Haven_Truck_and_Auto_Body__ctbke-23-30298__0001.0.pdf?mcid=tGE4TAMA NEXERA MEDICAL: Case Summary & 10 Unsecured Creditors ----------------------------------------------------- Debtor: NEXERA Medical, Inc. 1515 SE 17th Street POB 460062 Fort Lauderdale, FL 33316 Chapter 11 Petition Date: April 28, 2023 Court: United States Bankruptcy Court Southern District of Florida Case No.: 23-13388 Judge: Hon. Scott M. Grossman Debtor's Counsel: Jordan L. Rappaport, Esq. RAPPAPORT OSBORNE & RAPPAPORT, PLLC 1300 N Federal Hwy Suite 203 Boca Raton, FL 33432 Tel: 561-368-2200 Total Assets: $155,521 Total Liabilities: $1,902,367 The petition was signed by James Magruder as director. A full-text copy of the petition containing, among other items, a list of the Debtor's 10 unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/QOJDAVI/NEXERA_Medical_Inc__flsbke-23-13388__0001.0.pdf?mcid=tGE4TAMA OFFICE INTERIORS: Court OKs Interim Cash Collateral Access ---------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Virginia, Richmond Division, authorized Office Interiors of Virginia, Inc. to use cash collateral on an interim basis in accordance with the budget. As previously reported by the Troubled Company Reporter, First Community Bank is the only secured creditor with a lien on the Debtor's accounts. Pursuant to a promissory note and security agreement dated September 16, 2022, in the original principal amount of $750,000, FCB has a blanket lien on all assets of the Debtor. In addition, pursuant to a promissory note and security agreement dated October 6, 2022, in the original principal amount of $500,000, FCB has a blanket lien on all assets of the Debtor, including the cash collateral. The Line of Credit was subsequently increased to $600,000 UCC-1 Financing Statements have been filed evidencing the FCB Obligations. As adequate protection under section 361 of the Bankruptcy Code for the use of the cash collateral, FCB will have a replacement lien to the same extent, validity and priority as any prepetition security interests and liens held by FCB against all assets of the same type in which FCB had a security interest and lien prepetition that are or have been acquired, generated, or received by the Debtor after the Petition Date and the monthly payment on the FCB Obligations will continue to be made in the ordinary course and shall be applied to principal and interest in accordance with the applicable loan documents. Beginning April 30, 2023, and continuing on a monthly basis thereafter until the Debtor's confirmed plan becomes effective, the Debtor will remit $2,000 to its counsel. The Debtor's counsel will hold each Monthly Payment in escrow for the purpose of paying allowed administrative expense claims in the case. A final hearing on the matter is set for May 17, 2023, at 10 a.m. A copy of the Court's order and the Debtor's budget is available at https://bit.ly/3L9KHkP from PacerMonitor.com. The Debtor projects total operating expenses, on a weekly basis, as follows: $52,405 for the week ending April 29, 2023; $60,500 for the week ending May 6, 2023; $58,905 for the week ending May 13, 2023; and $9,250 for the week ending May 20, 2023. About Office Interiors of Virginia, Inc. Office Interiors of Virginia, Inc. was founded in 1988 in Ashland, Virginia, and provides an array of services to central Virginia and beyond, including office space design and construction, office moving services, general construction, and data migration. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Va. Case No. 23-31324) on April 16, 2023. In the petition signed by Othniel Glenwood Jordan, chief executive officer, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Keith L. Phillips oversees the case. Brittany B. Falabella, Esq., at Hirschler Fleischer, P.C, represents the Debtor as legal counsel. OXBOW CARBON: Moody's Rates 1st Lien Loans 'B1' & Hikes CFR to 'B1' ------------------------------------------------------------------- Moody's Investors Service assigned B1 ratings to Oxbow Carbon LLC's new $325 million senior secured first lien revolving credit facility (RCF) due 2028, $225 million senior secured first lien term loan A (TLA) due 2028 and $350 million senior secured first lien term loan B (TLB) due 2030. At the same time, Moody's upgraded Oxbow's corporate family rating to B1 from B2 and its probability of default rating to B1-PD from B2-PD. The ratings of the existing revolver, TLA and TLB will be withdrawn upon repayment. The ratings outlook changed to stable from positive. Upgrades: Issuer: Oxbow Carbon LLC Corporate Family Rating, Upgraded to B1 from B2 Probability of Default Rating, Upgraded to B1-PD from B2-PD Assignments: Issuer: Oxbow Carbon LLC Senior Secured First Lien Multi Currency Revolving Credit Facility, Assigned B1 Senior Secured First Lien Term Loan A, Assigned B1 Senior Secured First Lien Term Loan B, Assigned B1 Outlook Actions: Issuer: Oxbow Carbon LLC Outlook, Changed To Stable From Positive RATINGS RATIONALE The ratings upgrade and the assignment of B1 ratings to new credit facilities reflect Oxbow's robust operating and financial performance, improved credit profile and Moody's expectations that Oxbow will remain free cash flow positive and further reduce gross debt, enabling it to maintain Moody's-adjusted leverage below 4x. Oxbow's B1 CFR reflects its strong global industry position in the production and sale of calcined petroleum coke (CPC), marketing and distribution of fuel-grade petcoke (FGP), its broad geographic diversification, high industry barriers to entry and good liquidity. Oxbow benefits from the stability provided by the company's long-standing relationships with global steel and aluminum producers and relatively less volatile operating margins than other producers given that operating earnings of its calcining segment are generally based on the net spread between the green petcoke (GPC) and CPC prices. The rating factors in Oxbow's modest size and significant exposure to cyclical steel, aluminum, cement and other industrial end-markets. Oxbow's rating is also constrained by its limited business diversification given its reliance on the calcining and FGP marketing segments for the vast majority of its revenues and cashflows. However, Oxbow's position as one of the largest third party provider of distribution and logistics services worldwide provides some diversification benefits from its major lines of business. Oxbow's credit profile has improved materially over the last 12-18 months. Broad global economic recovery in 2021 and a rebound in primary aluminum smelting, steelmaking and industrial activities and the retirement of captive refining industry calcining capacity led to a rebound in demand and material improvement in prices for CPC, FGP and Distribution segment services. This trend continued in H1 2022 supported by record aluminum prices, supply constraints worsened by Russia's invasion of Ukraine and cost inflation driving up the prices of most commodities. Although CPC and FGP prices fell from the peaks in H2 2022, high realized prices and moderate volume recovery more than offset higher GPC, labor, other costs and working capital build-up allowing the company to expand margins and generate strong EBITDA and $149 million in free cash flow (net of distributions to owners) in FY2022. As a result of higher earnings, Oxbow's leverage, measured as Moody's-adjusted debt/EBITDA, improved to 1.8x as of December 31, 2022. Moody's believes that high CPC and FGP prices witnessed in 2022 are not sustainable and will continue to moderate over the next 6-12 months due to lower demand from the aluminum industry and broad softening in demand. High oil prices and persistent inflationary pressures will likely keep input and other costs elevated and lead to a contraction in operating margins. However, Moody's also expects CPC and FGP prices to remain well above historical levels due to continued supply constraints, refining captive calcining capacity closures and relatively solid demand for FGP which is typically used either as source of energy or carbon depending on the application. This should support strong earnings, free cash flow generation for Oxbow and further gross debt reduction. Moody's anticipates that Oxbow's leverage will increase to 3.0-3.5x in the next 12-18 months but will remain below 4x, the new ratings downgrade trigger. The stable outlook reflects Moody's view that despite the deteriorating macro environment, Oxbow will continue to generate strong earnings and positive free cash flow and maintain credit metrics and leverage profile commensurate with a B1 rating in mid-cycle and adverse commodity price scenarios. As a producer of carbon-based products and a supplier of key input ingredients for the steel and primary aluminum industries, Oxbow faces highly negative exposure to ESG risks. Many of the company's calcining plants do not have flue gas desulfurization systems installed and are significant emitters of sulfur dioxide. Although the company had historically followed mostly balanced financial policy, allocating produced cash to owner distributions and towards gross debt reduction, governance risk is high given the management's and ownerships tolerance for elevated gross debt levels, inherent volatility of the industry that requires stringent risk management, and the history of significant owner distributions. Oxbow had good liquidity as of December 31, 2022, supported by $174 million of cash and $168 million available under the existing $325 million RCF. Proforma the transaction, which is leverage neutral, increased borrowings under the new TLA and TLB will be offset by lower borrowings ($62 million) under the new RCF resulting in increased revolver availability of about $260 million. The TLA and TLB will be subject to mandatory annual amortization payments plus customary ECF sweep - for TLA, 5% (quarterly payments) in the first two years and 10% thereafter, and for TLB, 1% (quarterly payments) over the loan term. Moody's expect the company to remain in compliance with the RCF and TLA financial covenants which include minimum consolidated interest coverage ratio of 2.5x and maximum net leverage ratio of 4.50x, subject to material acquisition step-up to 5x when covenant is below 5x. Term loan B does not have any financial covenants. As proposed, the new credit facilities are expected to provide covenant flexibility that could adversely impact creditors including an uncommitted incremental facility amount not to exceed the $200 million plus an amount such that consolidated net leverage does not exceed 3.25x with netting ability capped at $100 million. No portion of the incremental may be incurred with an earlier maturity than the initial term loans. The credit agreement permits the transfer of assets to unrestricted subsidiaries, up to the carve-out capacities, subject to "blocker" provisions which prohibit transfer of material intellectual property to unrestricted subsidiaries, including by way of designation. Non-wholly-owned subsidiaries are not required to provide guarantees; dividends or transfers resulting in partial ownership of subsidiary guarantors could jeopardize guarantees, with no explicit protective provisions limiting such guarantee releases. There are no express protective provisions prohibiting an up-tiering transaction. The credit agreement requires 100% of net cash proceeds from asset sales to be used to repay the credit facilities, subject to a $15 million basket and a 360-day reinvestment period, with no step-downs on the prepayment. The B1 ratings of the new first-lien senior secured revolver and term loans, in line with the B1 CFR, reflect the preponderance of the secured debt in the capital structure. Collateral includes substantially all assets of the company and the stock of subsidiaries. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS An upgrade would be considered if the company consistently generates positive free cash flow, reduces gross debt such that it is able to maintain leverage below 3x in an adverse market environment and maintains (CFO-Dividends)/Debt at or above 20% on a sustained basis. The ratings and/or the outlook could be downgraded if liquidity deteriorates or if leverage is sustained persistently above 4x. Headquartered in West Palm Beach, Florida, Oxbow Carbon LLC (Oxbow) is a major producer and supplier of calcined petroleum coke (CPC). It is also among the world's largest distributors of carbon-based fuels including fuel grade petcoke (FGP) and other products. Revenue for the 12 months ended December 31, 2022 was about $2.7 billion. Oxbow is a subsidiary of Oxbow Carbon & Minerals Holdings, Inc., a private company controlled by William I. Koch, with private equity and strategic investors comprise the remaining shareholders. The company does not publicly disclose financial information. The principal methodology used in these ratings was Steel published in November 2021. OXBOW CARBON: S&P Upgrades ICR to 'BB-' on Stronger Credit Metrics ------------------------------------------------------------------ S&P Global Ratings raised its issuer credit rating on Oxbow Carbon LLC (Oxbow) to 'BB-' from 'B+'. Concurrently, S&P assigned its 'BB-' issue-level rating and '3' recovery rating to the proposed senior secured debt, indicating its expectation for a meaningful recovery (50%-70%; rounded estimate of 65%) in the event of a default. The stable outlook reflects S&P's expectation that Oxbow's credit metrics will remain robust with enough cushion to absorb earnings volatility as it heads into a period of lower commodity prices. S&P said, "Oxbow has sustained adjusted leverage below 3x over the past two years, a trend we anticipate will continue over our forecast period. In 2022, the company's adjusted EBITDA increased by about 50% over the previous year on the back of higher prices and volumes in all operating segments. As a result, adjusted leverage was below 2x, which compared favorably with below 3x in 2021. We expect earnings to soften this year as prices retreat from the highs of the previous year, with likely an about 50% decline in price in some segments. However, we believe the company's credit metrics have a buffer to absorb a 40%-45% decline in EBITDA and still maintain its adjusted leverage below 3x, all other things being equal, which is supportive of the current rating." Furthermore, post-refinancing, higher-than-usual mandatory amortizations and excess cash flow sweep provisions associated with the new facilities can help reduce debt over our forecast period. The proposed refinancing of the senior secured debt mitigates refinancing risk while bolstering liquidity. Oxbow proposes to issue new senior secured debt consisting of a $325 million revolving credit facility ($62 million drawn at close) due 2028, term loan A of $225 million due 2028, and term loan B of $350 million due 2030. The company will use the proceeds to fully repay about $637 million of existing senior secured debt due in 2024 and 2025. When completed, the proposed refinancing mitigates any refinancing concerns in a period of tightening credit conditions and capital market uncertainty, while at the same time extending the company's maturity profile with earliest material debt maturing in 2028. The transaction will also bolster the company's liquidity, which is supported by continued access to availability under the revolver and projected cash funds from operation of $200 million to $250 million over the next 12 months. Oxbow's calcined coke business should remain resilient amid sectorial tailwinds, offsetting declines in other segments. Last year, soaring power prices led to the curtailment of over 1 million tons of aluminum smelter capacity in Europe and the U.S., with additional capacity potentially at risk given our expectation of elevated energy prices. However, S&P expects Oxbow's calcined coke business will remain resilient in 2023 with 1%-2% volume growth, after a relatively flat growth last year. Furthermore, Oxbow should benefit from additional sales opportunities given the closure of some calcining coke plants by competitors. Additionally, calcined coke has become a substitute for needle coke given the limited supply of the latter. The strength of the higher-margined calcined coke business which accounts for a significant portion of EBITDA should partly offset lower volumes in the marketing and terminal businesses. S&P said, "Volumes in the marketing business still lagged pre-pandemic levels last year and we expect the trend to continue but improve over the next 12 to 24 months as Oxbow continues to work on securing supplies to meet robust demand and new market opportunities. For example, India recently reversed a ban on the use of petcoke in steelmaking, creating a new opening for petcoke flow. We believe opportunities like these create a platform for a stronger business pipeline over the next 12to 24 months." S&P said, "The stable outlook reflects our expectation that Oxbow's credit metrics will remain robust over the next 12 months with meaningful cushion to absorb earnings volatility heading into period of softer profits. We anticipate the calcined coke business will continue to provide a steady base for profitability while lower petcoke supplies continues to limit recovery in the marketing segment. We project adjusted leverage will remain below 3x." S&P could lower its ratings on Oxbow if leverage rises above 4x because of weak earnings and cash flow, or more debt. In such scenarios, S&P would expect: -- Its profits decline sharper than expected due to an operational disruption at any of its calcining plants or sustained periods of lower pricing in all segments; -- A deteriorating liquidity position; or -- Sustained periods of negative free operating cash flows. S&P said, "An upgrade is unlikely within the next 12 months given our expectation of softer earnings, the leverage-neutral nature of the proposed refinancing transaction, and Oxbow's history of prioritizing shareholder distributions with excess cash flows. However, we could raise our ratings on Oxbow if the company prioritized debt reduction over shareholder distributions leading to a better financial risk profile assessment. In such a scenario, we would expect adjusted leverage below 2x and a firm commitment from the company to sustain leverage at this level." ESG credit indicators: E-4, S-3, G-2 PECF USS: S&P Alters Outlook to Negative, Affirms 'CCC+' ICR ------------------------------------------------------------ S&P Global Ratings revised its outlook on PECF USS Intermediate Holding III Corp. to negative from stable and affirmed all of its ratings, including the 'CCC+' issuer credit rating. The negative outlook reflects the more challenging macroeconomic backdrop, rising interest rates, and significant cost inflation, which have weakened PECF's credit measures entering 2023. A material reduction in the company's EBITDA, along with significant increases in its debt and interest expense, have hampered its credit metrics, which S&P expects will remain unsustainable. Following its October 2021 recapitalization, PECF's S&P Global Ratings-adjusted debt balances essentially doubled. Additionally, roughly 80% of the company's debt was floating rate as of December 2022 and it does not have interest-rate hedges in place. PECF's interest expense roughly doubled in 2022, as interest rates materially increased, and S&P expects a further rise in 2023. The company was unable to fully pass through the material cost inflation (primarily for labor and fuel) in 2022 to its customers, which led it to sustain weaker-than-expected EBITDA and EBITDA margins (S&P Global Ratings-adjusted EBITDA declined over 15% in 2022). Additionally, PECF experienced a reduction in the frequency of service requests by its customers following a spike during the height of the COVID-19 pandemic. Because of these factors, the company's S&P Global Ratings-adjusted debt to EBITDA weakened to about 10x as of the end of 2022 from about 8x as of the end of 2021. In its base-case forecast, S&P assumes PECF's weighted average debt to EBITDA will remain in the 9x-10x range. S&P said, "In 2023, we expect modest EBITDA growth, which reflects our expectation that the company will remain focused on passing through price increases, implementing its ongoing cost-reduction initiatives, and benefitting from the more normalized cost environment (particularly compared with 2022). Despite this, we expect PECF will generate limited reported free cash flow (although an improvement from 2022 levels) in 2023, given the expected increase in its interest expense. We believe the company will prioritize preserving its liquidity position, and thus anticipate a material drop in its capital expenditure (capex) and acquisition spending in 2023, which is a key support for the rating. We expect PECF's liquidity position (nearly $145 million of cash and revolver availability as of December 2022) will enable it to continue making timely interest payments and have not factored in any below-par debt buybacks. We anticipate the company's financial policies will remain aggressive, given its private-equity ownership and track record of supplementing its organic growth with acquisitions. We believe there is ample opportunity for PECF to continue to expand over the next few years, given its focus on improving its route density (which boosts margins), the highly fragmented nature of its industry, its lack of a presence in about half of the U.S. "Our assessment of the company's business risk profile reflects its limited diversity due to its focus on portable sanitation and material exposure to cyclical end markets. "The overall level of demand in the company's industry is strongly tied to the residential and nonresidential construction markets (about 45% of total revenue), which tend to be project oriented. Weak construction activity during past downturns significantly reduced PECF's revenue and EBITDA, and we expect residential construction activity will remain depressed in 2023. Portable sanitation is also a niche industry (estimated at $6 billion). While we believe the company's increased scale, geographic density, and efforts to expand into relatively less-cyclical markets (e.g., industrials) better position it to weather a potential economic slowdown, we still believe it is susceptible to significant demand volatility in a market downturn. Somewhat offsetting these risks are the company's leading position (several times larger than its nearest competitor) as the only national player in the niche portable sanitation market. PECF is one of the few participants capable of servicing national brands across the U.S. Its expanding line of complementary services, such as fencing and roll-off dumpsters, bolsters its market position. We believe this strengthens PECF's value proposition as a one-stop shop for site management needs, particularly for national accounts. These factors support its good operating performance and high customer retention rate. The performance of the company's events business (about 10% of revenue) has continued to improve, support by the return to live sporting events and concerts amid the waning headwinds from the pandemic. "The negative outlook reflects the more challenging macroeconomic backdrop, rising interest rates, and significant cost inflation, which have weakened PECF's credit measures entering 2023. Specifically, the company's S&P Global Ratings-adjusted debt to EBITDA increased to about 10x as of the end of 2022 and we believe its weighted average debt leverage will remain between 9x and 10x. We expect the company's residential construction volumes will remain challenged in 2023 but forecast modest EBITDA growth because of the expected reduction in its operating costs and some catch up on its pass-through of price increases to its customers. We expect the company will remain focused on preserving its liquidity position. Therefore, we expect a material decline in its capex and acquisition spending in 2023. As part of its 2021 recapitalization, PECF raised an additional $200 million unfunded equity commitment, which it can use for general corporate purposes. We do not believe that the company will trigger its springing covenants over the next year, anticipate it will not pursue any debt buybacks that we would view as distressed exchanges, and note it does not face material upcoming debt maturities, which are key factors underpinning the rating." S&P could lower its ratings on PECF in the next year if: -- Its earnings deteriorate, due to weak end-market demand in its core residential and nonresidential construction end markets, or it is unable to implement price increases to offset its higher costs; -- Its revenue declines modestly in 2023 and its EBITDA margins decline by 100 basis points (bps) relative to its base-case assumption; -- The company undertakes a transaction that S&P views as a distressed exchange; -- It skips an interest payment (although this is unexpected given its current liquidity position); -- Its liquidity weakens, due to persistent negative free cash flow generation, challenging its covenant compliance; or -- It completes a larger-than-expected debt-funded acquisition or a large dividend recapitalization. -- If some of these scenarios to occur, S&P believes its debt to EBITDA would consistently remain at 10x or above. S&P could take a positive rating action on PECF in the next year if: -- Its volumes and pricing are stronger than we project, such that its revenue increases by 5% and its EBITDA margins rise by about 200 bps relative to our base-case assumption. Under such a scenario, we believe its weighted average debt to EBITDA would approach 8x; -- The company generates moderately positive free cash flow, which allows it to improve its liquidity position and reduce its debt; and -- S&P believes that the company's financial policies would support maintaining its improved leverage levels even after incorporating potential acquisitions and shareholder rewards. ESG credit indicators: E-2, S-2, G-3 S&P said, "Environmental and social credit factors have no material influence on our rating analysis of PECF USS Intermediate Holding III Corp. Governance factors have a moderately negative impact because we view financial sponsor-owned companies with aggressive or highly leveraged financial risk profiles as demonstrating corporate decision-making that prioritizes the interests of their controlling owners, which typically have finite holding periods and focus on maximizing shareholder returns." RADIATE HOLDCO: Moody's Cuts CFR to Caa1 & Sr. Secured Debt to B3 ----------------------------------------------------------------- Moody's Investors Service downgraded Radiate HoldCo, LLC's Corporate Family Rating to Caa1, from B2 and Probability of Default Rating to Caa2-PD, from B2-PD. Concurrently, Moody's downgraded the rating on the Company's Senior Secured Credit Facility to B3 from B1 and the Senior Unsecured Notes to Caa3 from Caa1. The outlook remains negative. The rating action reflects weak liquidity, deteriorating operating performance and weak credit metrics. Leverage is very high (7.4x PF at YE 2022) and rising (to high 7x / approaching 8x by 2024) while FCF to debt will be negative (in the low single digit percent range). Moody's believes the risk of a distressed exchange is high and rising with a capital structure that appears unstainable. The company's already weak market position is deteriorating, evidenced by a decline in fundamentals including a decline in revenue and EBITDA expected over the next 12-18 months due to an acceleration in subscriber losses in residential data, video, and voice due to high and rising competitive intensity. Coupled with high capital intensity and rising borrowing costs, free cash flow will be significantly negative requiring use of nearly all existing revolving credit facility capacity to cover the shortfall (assuming no access to alternate liquidity). Moody's believes any reduction in capital spending to help cover the deficit will most likely defer, not eliminate investments, and will have direct and unfavorable impact on subscriber acquisition and or retention. Downgrades: Issuer: Radiate HoldCo, LLC Corporate Family Rating, Downgraded to Caa1 from B2 Probability of Default Rating, Downgraded to Caa2-PD from B2-PD Senior Secured First Lien Bank Credit Facility, Downgraded to B3 from B1 Backed Senior Secured First Lien Regular Bond/Debenture, Downgraded to B3 from B1 Backed Senior Unsecured Regular Bond/Debenture, Downgraded to Caa3 from Caa1 Outlook Actions: Issuer: Radiate HoldCo, LLC Outlook, Remains Negative RATINGS RATIONALE Radiate's credit profile reflects the Company's moderate scale and highly negative governance risk, reflecting financial strategy and risk management policies that tolerates high and rising leverage (7.4x year-end 2022, Moody's adjusted) along with a history of material shareholder distributions. Ownership and control are also highly concentrated within a single private equity firm. Capital intensity is high, with investments at least high 20% of revenue and a rising interest burden, producing negative free cash flow after working capital needs. The Company's market position is weak, due to its mostly overbuilder operating strategy. This is evident in falling subscriber trends and penetration rates that are well below the peer group average (e.g. U.S. rated cable operators), including some measures ranked near the bottom. More intense competition has stalled the broadband growth engine, with an accelerating decline in data subscriber trends in recent quarters while voice and video subscribers are declining at high and accelerated rates. The weakness is reflected in below average performance metrics including EBITDA to homes passed and Triple Play Equivalent (TPE; defined as a simple average of the company's three main product penetration rates) that will fall to the low teens percent range over the next 12-18 months. Liquidity is also weak. Despite these challenges, the business model produces predictable monthly subscription services paid for by a large and very diverse customer base. Supporting the business are valuable assets, specifically a fiber-rich high-speed communication network with superior speeds. Profitability is also relatively stable, with strong EBITDA margins in the mid 40% range. Radiate has weak liquidity with limited to negative operating income expected in some quarters over the next 12 months, a largely drawn revolving credit facility (assuming no sponsor support), tightening covenant headroom, and a mostly secured capital structure which limits alternate liquidity. The instrument ratings reflect the probability of default of the Company, as reflected in the Caa2-PD Probability of Default Rating, and an average expected family recovery rate of 65% at default given consideration for the potential estimated value of the assets at default. Moody's rates the senior secured bank credit facilities and senior secured notes at B3, one notch above the CFR with a fully secured priority claim on all assets. The unsecured notes are rated Caa3, two notches below the CFR with the subordination to secured bank lenders. The negative outlook reflects Moody's expectation for further subscriber losses and increasing leverage, with an elevated risk for a distressed exchange given a potentially unsustainable capital structure. Revenue declines will accelerate to mid-single digit percent, driving revenue down to near $1.6 billion. EBITDA margins will remain strong in the mid 40% range but capital intensity will remain high (capex to revenue in the high 20% to 30% range), and borrowing costs are rising (to mid-7%). Free cash flow will be negative, approximately -$100 to -$125 million per annum. Moody's expects the deficit to be covered by the company's revolving credit facility. Leverage will rise to high 7x, and free cash flow to debt will be negative, in the low single-digit percent range. Moody's outlook reflects certain key assumptions including data broadband data, voice, and video subscribers falling by mid-single digit percent, high single-digit, and high-teens respectively. Moody's expects liquidity to be weak. Note: All figures are Moody's adjusted over the next 12-18 months unless otherwise noted and assumes no sponsor support or material M&A transactions. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's could consider a positive rating action if there is a material improvement in liquidity, leverage, and operating performance such that the sustainability of the capital structure materially improves. Moody's could consider a negative rating actionif the risk of default rises further or Moody's assessment of recovery in a default scenario deteriorates. Radiate, based in Princeton, New Jersey, is the parent of RCN Telecom Services, LLC, Grande Communications Networks LLC, and Wave Broadband, d/b/a/ Astound Broadband. The Company provides video, high-speed internet and voice services to residential and commercial customers across a diversified footprint spanning certain markets on the West and Northeast coast as well as Chicago and Texas. As of the period ended December 31, 2022, the Company served approximately 293 thousand video, 1,086 thousand HSD, and 243 thousand voice subscribers. Revenue for the last twelve months ended December 30, 2022, was approximately $1.7 billion. Radiate is majority owned and controlled by Stonepeak Infrastructure Partners, with TPG Capital and executive management (Patriot Media Consulting) holding minority interests. The principal methodology used in these ratings was Pay TV published in October 2021. RED ROSE INC: Taps Garman Turner Gordon as Special Counsel ---------------------------------------------------------- Red Rose, Inc. and its affiliates seek approval from the U.S. Bankruptcy Court for the District of Nevada to employ Garman Turner Gordon, LLP as special counsel. The Debtors need the firm's legal assistance to pursue certain claims against former directors and officers. The firm will be paid $325 to $895 per hour. As disclosed in court filings, Garman Turner Gordon is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached at: Gregory E. Garman, Esq. William M. Noall, Esq. Teresa M. Pilatowicz, Esq. Garman Turner Gordon, LLP 7251 Amigo Street, Suite 210 Las Vegas, NV 89119 Tel: (725) 777-3000 Fax: (725) 777-3112 Email: ggarman@gtg.legal wnoall@gtg.legal tpilatowiz@gtg.legal About Red Rose Inc. Red Rose, Inc. is a subsidiary of Petersen-Dean Inc., a full-service, privately-held roofing and solar company. On June 11, 2020, Red Rose and its affiliates and parent company sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Lead Case No. 20-12814). At the time of the filing, Red Rose and Petersen-Dean disclosed $10 million to $50 million in both assets and liabilities. Judge Mike K. Nakagawa oversees the cases. The Debtors tapped Fox Rothschild, LLP to serve as their bankruptcy counsel and JHS CPAs, LLP to provide tax-related services. The U.S. Trustee for Region 17 appointed a committee of unsecured creditors on June 27, 2020. Brown Rudnick LLP and Schwartz Law, PLLC serve as the committee's bankruptcy counsel and local counsel, respectively. REDSTONE HOLDCO 2: $450M Bank Debt Trades at 39% Discount --------------------------------------------------------- Participations in a syndicated loan under which Redstone Holdco 2 LP is a borrower were trading in the secondary market around 61.4 cents-on-the-dollar during the week ended Friday, April 28, 2023, according to Bloomberg's Evaluated Pricing service data. The $450 million facility is a Term loan that is scheduled to mature on August 6, 2029. The amount is fully drawn and outstanding. Redstone Holdco 2 LP and Redstone Buyer LLC were formed as part of the buyout of the RSA Security business from Dell Inc. RENNOVA HEALTH: Provides Update After 2022 Financial Statements --------------------------------------------------------------- Rennova Health, Inc. Chief Executive Officer Seamus Lagan recently joined Stock Day host Kevin Davis to provide an update after filing the 2022 financial statements and other information in its Form 10-K with the SEC. Davis began the interview by asking Lagan to remind his listeners what the Company does. Lagan explained the current business operations in rural healthcare and the plans to open a mental and behavioral facility at its hospital. Davis went on to ask about what he saw as a significant improvement from previous years, in the recently filed financial results. Lagan pointed out that revenues improved by over $10 million and were up from approximately $3.2 million in 2021 to just over $13 million in 2022. He also pointed out an $11.5 million reduction in losses from continuing operations before other income (expense) and income taxes. These losses were reduced from approximately $12.5 million in 2021 to just over $1.4 million in 2022. Lagan continued to say that he believed there would be a continued improvement in revenue from current operations and hoped to add new revenue this year from the new mental and behavioral health division. Davis followed by asking for an update on the timeframe for opening Myrtle Recovery Centers and reminded listeners that the Company had previously launched a new web site for this project at www.myrtlerecoverycenters.com Lagan replied that opening was well on track for the second quarter and went on to describe the project in three parts, the facility, licensure with the State, and the employees required. He described that work onsite is complete and the facility is ready to accept patients. The licensure process is at an advanced stage with only a fire inspection required by the State to finalize a pre-opening site visit. He voiced a belief that the fire inspection will be completed in a matter of days and that he could see no reason why a pre-opening site visit by the State will not result in the granting of the license. He also explained that the total employed will start at approximately 14 and grow to approximately 25 when the facility is at full capacity and stated that there is an experienced CEO running the project, that adequate employees have been secured to open and that adequate applications have been received to staff the facility for full capacity. He explained that it was expected that most of the patients at this initial 30 bed facility will be paid for by Medicaid or Medicare and confirmed his belief that the project could add significant and profitable revenues to Company operations. Davis then asked about the investment Rennova held in InnovaQor (INQR) and asked for an explanation to help his new listeners understand this structure. Lagan explained the previous separation of a software division into InnovaQor and explained that InnovaQor had an exciting project underway for the development of a medical professional's communication network. He described that this network should generate significant revenues from subscription fees. He further described the intention, subject to meeting the relevant regulations and requirements, to distribute some of the investment in InnovaQor, to the Rennova shareholders and stated his belief that Rennova will shortly start to get repaid the money it has provided to support the project. Davis ended the interview by asking Lagan what message he would like the Company's shareholders to take away from the interview. Lagan responded by saying that he hoped the listeners would see the progress that has been in the past year and that continued progress would be made for the remainder of this year. To hear Seamus Lagan's entire interview, follow the link to the podcast here: https://audioboom.com/posts/8286271-rnva-ceo-seamus-lagan-is-featured-on-the-stock-day-podcast Investors Hangout is a proud sponsor of "Stock Day," and Stock Day Media encourages listeners to visit the company's message board at https://investorshangout.com/ About Rennova Health Rennova Health, Inc. -- http://www.rennovahealth.com-- is a provider of health care services. The Company owns one operating hospital in Oneida, Tennessee, a hospital located in Jamestown, Tennessee that it plans to reopen and operate and a rural health clinic in Kentucky. The Company's operations consist of only one segment. Rennova Health reported a net loss available to common stockholders of $334.17 million for the year ended Dec. 31, 2022, compared to a net loss available to common stockholders of $500.87 million for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $20.57 million in total assets, $49.67 million in total liabilities, and a total stockholders' deficit of $29.09 million. Salt Lake City, Utah-based Haynie & Company, the Company's auditor since 2018, issued a "going concern" qualification in its report dated April 17, 2023, citing that the Company has recognized recurring losses and negative cash flows from operations. This raises substantial doubt about the Company's ability to continue as a going concern. RESTORATION HARDWARE: S&P Lowers ICR to 'BB-', Outlook Negative --------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on Corte Madera, Calif-based luxury home furnishings retailer Restoration Hardware Inc.'s (d/b/a RH) to 'BB-' from 'BB'. S&P also lowered its rating on RH's secured debt to 'BB-' from 'BB'; the '3' recovery rating is unchanged and indicates its expectations for meaningful (50%-70%; 50% rounded estimate) recovery in the event of default. The negative outlook reflects the risk that weaker demand in the home furnishing sector stemming from a challenging macroeconomic environment, or a more aggressive financial policy, could lead to sustained elevated leverage above S&P's previous forecast. The downgrade reflects persistent operating challenges anticipated through 2023, leading to deterioration in RH's credit measures. S&P said, "We expect weaker performance in 2023 as the company continues to face muted consumer demand amid a difficult macroeconomic environment with higher interest rates and a weak housing economy. We forecast EBITDA margins to decline approximately 400 basis points (bps) in fiscal 2023 (following roughly 400 bps deterioration in 2022), as we expect continued cost pressures along with a projected decrease in revenue of 19%. The revenue decline is largely attributed to the current economic climate, and we believe a weak housing market and a decline in luxury home sales will continue to weigh on demand. "In addition to declining earnings, we expect capital expenditures and share repurchases will result in higher leverage over the next 12 months. Its international expansion and gallery remodels require significant capital, leading to our forecast for about $275 million of capital spending in 2023. Meanwhile, as of its fiscal year ended Jan. 28, 2023, the company had $1.45 billion outstanding under its share repurchase program and we believe the recent declines in its share price incentivizes the company to continue to repurchase additional shares. Still, we anticipate a prudent approach to share repurchases this year that maintains sizable cash balances for financial flexibility. "We forecast S&P Global Ratings-adjusted leverage in the high-3x area through 2023 and into 2024. Due to our expectation of the company's sustained weaker credit measures and volatile operating results, we have revised our financial risk profile assessment to significant from intermediate. "A weak macroeconomic environment and softening demand in the home furnishing sector will pressure results temporarily. We believe inflationary pressures will continue to drive lower consumer discretionary spending at least over the next 12 months. While this will likely be less pronounced for more affluent consumers, we still anticipate reduced propensity to spend for this demographic. Within home related categories, we think abundant spending in recent years has satiated demand. Meanwhile, rising interest rates have led to fewer home sales, which dims prospects for higher demand for home furnishing products. "Nevertheless, we believe RH has improved its brand recognition and reputation over the past several years, leading to a larger customer base that the company can harness as macroeconomic pressures ease and demand for home furnishing products returns. This should lead to a recovery following the steep decline projected in 2023, with modestly positive revenue growth in 2024. "RH does not provide a public leverage target, though we anticipate leverage sustained in the high- 3x area over the next 12 to 24 months. We project S&P Global Ratings-adjusted leverage (including our adjustment for capital and operating leases) will increase to the high-3x area in 2023 (from 2.3x in 2022). Additionally, we forecast limited free operating cash flow (FOCF) in 2023 of only about $52 million (compared to $202 million in 2022) as earnings deteriorate while the company continues to invest in remodeling existing galleries and opening new galleries internationally. While the company doesn't provide a public leverage target, we think it will sustain leverage below 4x. Also, in our view, the company's $1.5 billion of cash on hand as of the fiscal year ended Jan. 28, 2023, provides it with ample liquidity to support its capital priorities, including share repurchases." The negative outlook reflects the risk of a downgrade if the company faces greater operational pressure or if it pursues share repurchases more aggressively than we anticipate, leading to elevated S&P Global Ratings-adjusted debt to EBITDA above 4x. S&P could lower its rating on RH if it expects leverage to be sustained at 4x or higher. This could occur if: -- Operating performance deteriorates beyond S&P's expectation, leading to lower revenues, earnings, and FOCF relative to its forecast; or -- The company pursues share repurchases at a more aggressive pace than it anticipate. S&P could revise the outlook to stable if: -- Operating performance stabilizes and we expect at least a modest recovery in profitability and cash flow generation; and -- The company maintains sufficient cash on its balance sheet to preserve financial flexibility while business conditions remain uncertain, leading to leverage sustained comfortably below 4x. ESG credit indicators: E-2, S-2, G-2 REVLON INC: To Choose New Board Chairman After Bankruptcy Exit -------------------------------------------------------------- Kathryn Hopkins of WWD reports that Revlon is gearing up to unveil the new chairman of the board as it prepares to exit bankruptcy, multiple sources told WWD. WWD understands that the troubled company, whose brands include Revlon, Elizabeth Arden and Almay, has been working behind the scenes to appoint a new chair, approaching multiple executives in both the beauty and apparel sectors, after a bankruptcy judge approved a deal with lenders that led to Ronald Perelman's exit from the company after decades at the helm. The sources mentioned multiple names have been in the mix, including Laurie Ann Goldman, the former Spanx chief executive officer who had a short stint as CEO at Avon. She has had much board experience, including at Guess, the European Wax Center and Adore Me, and is the board chair at Claire's. Through Revlon's newly approved bankruptcy plan, ownership stakes will be handed to secured lenders, while existing shareholders, including MacAndrews chairman Perelman, who controlled around 85 percent of the company as of earlier this year, will be left with nothing. The plan will eliminate more than $2.7 billion in debt from its balance sheet, with approximately $1.5 billion of debt outstanding. In exchange, the majority of Revlon's equity will be owned by former lenders of a 2020 loan, known as the Brandco lenders. Revlon is expected to emerge with approximately $285 million of liquidity, to be funded through an equity rights offering, a new money senior secured credit facility, and new asset-based loan. Perelman's daughter, Debra Perelman, will remain as Revlon's president and CEO. The company is understood to be actively recruiting other executivess, in addition to the chair. Prior to filing for Chapter 11 bankruptcy, Revlon had been struggling with a hefty pile of debt -- about $3.7 billion -- that it spent much of 2020 renegotiating, which enabled it to avoid a more formal restructuring process back then. But supply chain issues, soaring inflation and increased competition from the likes of the Estée Lauder Cos., Coty Inc. and a plethora of digital start-ups only exacerbated the situation. Those factors, combined with loans coming up for renewal, forced Revlon into bankruptcy in 2022. Revlon also previously tried to sell several of its brands over the years, cycling through different bankers, but no deals were completed. Ronald Perelman had been the majority owner of Revlon since the mid-'80s, gaining control via a hostile takeover through his company MacAndrews & Forbes. He took Revlon to new heights in the '80s and '90s, when he used the brand to catapult himself into the worlds of society, fashion and Hollywood by tapping such faces as Cindy Crawford, Christy Turlington, Jerry Hall and more. But in 2020, he revealed that he'd been selling off assets -- from companies to fine art -- and at the beginning of this year, he offloaded his opulent Lily Pond Lane mansion in East Hampton, New York, for $84.5 million. This was down from the original listing price of $115 million. About Revlon Inc. Revlon Inc. manufactures, markets and sells an extensive array of beauty and personal care products worldwide, including color cosmetics; fragrances; skin care; hair color, hair care and hair treatments; beauty tools; men's grooming products; antiperspirant deodorants; and other beauty care products. Today, Revlon's diversified portfolio of brands is sold in approximately 150 countries around the world in most retail distribution channels, including prestige, salon, mass, and online. Since its breakthrough launch of the first opaque nail enamel in 1932, Revlon has provided consumers with high-quality product innovation, performance and sophisticated glamour. In 2016, Revlon acquired the iconic Elizabeth Arden company and its portfolio of brands, including its leading designer, heritage and celebrity fragrances. Revlon is among the leading global beauty companies, with some of the world's most iconic and desired brands and product offerings in color cosmetics, skin care, hair color, hair care and fragrances under brands such as Revlon, Revlon Professional, Elizabeth Arden, Almay, Mitchum, CND, American Crew, Creme of Nature, Cutex, Juicy Couture, Elizabeth Taylor, Britney Spears, Curve, John Varvatos, Christina Aguilera and AllSaints. Revlon sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 22-10760) on June 15, 2022. Fifty affiliates, including Almay, Inc, Beautyge Brands USA, Inc., and Elizabeth Arden, Inc., also sought bankruptcy protection on June 15 and June 16, 2022. Revlon disclosed total assets of $2,328,093,000 against total liabilities of $3,689,240,395 as of April 30, 2022. The Hon. David S. Jones is the case judge. The Debtors tapped Paul, Weiss, Rifkind, Wharton & Garrison, LLP as bankruptcy counsel; Mololamken, LLC as special litigation counsel; PJT Partners, LP as investment banker; KPMG, LLP as tax services provider; and Alvarez & Marsal North America, LLC as restructuring advisor. Robert M. Caruso and Matthew Kvarda of Alvarez & Marsal serve as the Debtors' chief restructuring officer and interim chief financial officer, respectively. Meanwhile, Kroll Restructuring Administration, LLC is the Debtors' claims agent and administrative advisor. The U.S. Trustee for Region 2 appointed an official committee of unsecured creditors on June 24, 2022. Brown Rudnick, LLP, Province, LLC and Houlihan Lokey Capital, Inc., serve as the committee's legal counsel, financial advisor and investment banker, respectively. RIVERBED HOLDINGS: Moody's Cuts CFR & Senior Secured Debt to Caa3 ----------------------------------------------------------------- Moody's Investors Service downgraded Riverbed Holdings, Inc.'s ratings including the Corporate Family Rating to Caa3 from Caa1. The downgrade was driven by liquidity shortfalls and the very high likelihood of default. The outlook is negative. Riverbed has struggled to generate positive cash flow since emerging from Chapter 11 in December 2021. Cash balances were $38 million as of the company's last reported financials of September 30, 2022. The company did not have a revolving credit facility at emergence and Moody's does not believe the company has subsequently been able to raise any type of external revolving facilities. The company was planning to establish an ABL by early 2023. RATINGS RATIONALE Riverbed's Caa3 CFR is driven by high leverage, weak cash flow, and challenges the company to reverse revenue declines. Although Riverbed emerged from its Chapter 11 restructuring with a significantly reduced debt load, difficulty offsetting the declining WAN Optimization (WANOp) business remain. While WAN Optimization is still a critical function, demand has declined at double digit levels as SD-WAN ramps up as a disruptive technology and more applications and infrastructure migrate to the cloud. Riverbed retains a leading position in the WANOp market despite the upheaval in the networking industry. The company also has a leading position in the high growth network performance monitoring (NPM) software market, and a strong niche position in the fast growing application performance monitoring (APM) market. Although Riverbed has solid positions in the growth markets, it still significantly lags industry revenue growth rates. Riverbed's application and network monitoring product lines have the potential to offset the declines in the legacy WANOp lines, though the timing of any stabilization of revenues remains uncertain. Without revenue growth, it will be difficult for Riverbed to support the current capital structure. Financial leverage for the period ended September 30, 2022, was estimated at over 7x pro forma for restructuring and transaction related charges (Moody's adjusted). Free cash flow was estimated to be negative for the period pro forma for the emergence from Chapter 11 and related expenses. Liquidity is weak which reflects Moody's expectation of negative free cash flow over the next year and limited cash balances. Cash balances were $38 million as of September 30, 2022. Although Riverbed has the ability to PIK a portion of its cash interest payments, liquidity will likely remain compromised without an external source of liquidity. The company did not have a revolver or external liquidity source as of September 30, 2022. The negative outlook reflects the likelihood of a near term default or distressed exchange of its debt. Riverbed is privately held and disclosures are limited. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if Riverbed does not make its required interest or amortization payments. The ratings could be upgraded if the company stabilizes performance and materially improves liquidity, including adding a revolving credit facility. Downgrades: Issuer: Riverbed Holdings, Inc. Corporate Family Rating, Downgraded to Caa3 from Caa1 Probability of Default Rating, Downgraded to Caa3-PD from Caa1-PD Issuer: Riverbed Technology LLC Backed Senior Secured Bank Credit Facility, Downgraded to Caa3 from Caa1 Outlook Actions: Issuer: Riverbed Holdings, Inc. Outlook, Remains Negative Issuer: Riverbed Technology LLC Outlook, Remains Negative Headquartered in San Francisco, CA, Riverbed is a leading provider of Wide Area Network (WAN) Optimization and performance and application monitoring products and services. Riverbed is principally owned by a group of institutional investors, with Apollo Global Management, Inc. holding a majority position through its various managed funds. Revenues were approximately $535 million for the twelve months ended September 30, 2022. The principal methodology used in these ratings was Software published in June 2022. ROYAL BLUE REALTY: May Use $37,000 of Cash Collateral Thru June 30 ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York authorized Royal Blue Realty Holdings, Inc. to continue using cash collateral on a further interim basis in accordance with the budget, with a 10% variance. Specifically, the Debtor is authorized to use up to $37,460, covering the period from May 1 through June 30, 2023. This amount includes $35,039 in payments reimbursed by Comm-U. Deutsche Bank National Trust Company may assert an interest in the cash collateral. DB is the Trustee for American Home Mortgage Asset Trust 2006-6 Mortgage-Backed Pass-Through Certificates, Series 2006-6; or Deutsche Bank National Trust Company as Trustee for American Home Mortgage Asset Trust 2007-1 Mortgage-Backed Pass-Through Certificates, Series 2007-1. DB asserts mortgage liens on and security interests in the Debtor's nine residential apartments comprised of tax lots in Block 604 and the rents or other proceeds derived from those apartments, including funds collected by Elaine Shay, the state court appointed receiver. The Debtor materially disputes DB's mortgage interests as well as any other interests DB may assert in any of the Debtor's assets including but not limited to the Prepetition Collateral and the cash collateral, respectively. As adequate protection for the Debtor's use of cash collateral, DB is granted valid, binding, enforceable, and automatically perfected post-petition liens on all property, whether now owned or hereafter acquired or existing and wherever located, of the Debtor and the Debtor's estate. DB's replacement liens include avoidance actions under Chapter 5 of the Bankruptcy Code. As additional adequate protection, the Debtor will, among other things, maintain all of its insurance policies in full force and effect, and will make timely payments of all property taxes and common charges relating to the prepetition collateral. Unless extended further with the written consent of DB or by Court order, the authorization granted to the Debtor to use cash collateral under the Eleventh Interim Order will terminate immediately upon the earliest to occur of the following: (i) June 30, 2023; (ii) The entry of an order dismissing the Case; (iii) The entry of an order converting the Case to a case under Chapter 7; (iv) The entry of an order appointing a trustee or an examiner with expanded powers with respect to the Debtor's estate; (v) Entry of an order reversing, vacating, or otherwise amending, supplementing, or modifying the Order; (vi) Entry of an order granting relief from the automatic stay to any creditor -- other than DB -- holding or asserting a lien in the Prepetition Collateral; or (vii) The Debtor's breach or failure to comply with any material term or provision of this Eleventh Interim Order after receipt of no less than five business days' notice to cure. A final hearing on the matter is scheduled for June 28 at 10 a.m. A copy of the stipulated order is available for free at https://bit.ly/4247xRK from PacerMonitor.com. About Royal Blue Realty Holdings Royal Blue Realty Holdings, Inc., holding business at 162-174 Christopher Street, New York, N.Y., is primarily engaged in renting and leasing real estate properties. Royal Blue filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 21-10802) on April 26, 2021. As of the Petition Date, the Debtor estimated between $1 million to $10 million in assets, and between $10 million to $50 million in liabilities. The petition was signed by Andrew Nichols, chief restructuring officer. Davidoff Hutcher & Citron LLP represents the Debtor as counsel. Judge Hon. Lisa G. Beckerman oversees the case. Elaine Shay was appointed as temporary receiver with respect to the Debtor by order of the Supreme Court of New York on March 9, 2021. SALE LLC: As Good as it Gets Cafe Files Subchapter V Case --------------------------------------------------------- Sale LLC filed for chapter 11 protection in the District of Massachusetts. The Debtor elected on its voluntary petition to proceed under Subchapter V of chapter 11 of the Bankruptcy Code. The Debtor operates three restaurants d/b/a "As Good as it Gets Cafe" with locations in Action, Norwood and Wilmington, Massachusetts. The Debtor serves a wide variety breakfast and lunch menu items in a family friendly dining atmosphere. The Debtor's restaurants are located at 35 Lowell Street, Wilmington, 1210 Providence Highway, Norwood, and 20 Nagog Park, Acton, Massachusetts. The Debtor also operates a fourth "pop-up" location at Woburn Toyota where it serves a more limited menu of breakfast and lunch items to dealership employees and customers. The Debtor is owned and operated by its managers Abderrahim Hmina and Nabila Mrabet Hmina, husband and wife, each of Burlington, Massachusetts. Mr. and Mrs. Hmina formed Sale, LLC to purchase the existing Wilmington location of As Good as It Gets Cafe October 2017. Business at the Wilmington location was initially very strong and the Hminas began making plans to expand and open a second restaurant in 2019. To fund this expansion, the Debtor obtained loans from various individual acquaintances bearing high interest rates. Unfortunately, after making the substantial investment to open a second location, the opening of the Debtor's Norwood location, scheduled for March 2020, was significantly delayed by the onset of the COVID-19 Pandemic. The Debtor's Wilmington location was closed until June 2020 and then, after reopening, it had limited seating capacity and thus, very limited revenues. As a result, the Debtor began to fall into arrears on its Massachusetts meals taxes and other obligations. Still the Debtor's underlying business was strong and as the pandemic subsided and the public resumed dining out, the Debtor saw more opportunity to expand, and opened its Acton location in April 2021. This expansion was funded, once again, with loans from various individuals bearing high interest rates. The Debtor's business began to recover in the summer of 2021 but, by that time its meals tax liabilities had grown substantially, and its debt service expenses were severely restricting its cash flow and ability to pay its ongoing operating expenses. In late 2022, the Debtor began receiving solicitations from so-called "merchant cash lenders" offering rapid business funding, carrying usurious interest rates, substantial fees and automatic daily withdrawals from the Debtor’s bank account. These merchant cash loans, provided the Debtor with short-term breathing room, but led to more substantial cash-flow problems. The Debtor continued to receive solicitations from merchant lenders offering quick funding. This quickly developed into a downward spiral in which the Debtor's debt servicing costs quickly impaired its ability to operate. By February 2023, the Debtor had seven different merchant cash loans outstanding with a total balance of more than $500,000. By March 2023, the Debtor could no longer keep up with its debt service costs and it defaulted on payments to the merchant cash lenders. The Debtor was forced to seek relief under Chapter 11 due to one of the merchant lenders attaching its bank account and subsequently its credit card processing receipts, leaving the Debtor unable to meet its payroll and other obligations. As of the Petition Date the Debtor's assets consisted of furnishings, fixtures and equipment at its three locations with an estimated value of $75,000, perishable and non-perishable food items and packaging supplies with an estimated value of $15,000, a 2017 Ford 250Transit Van worth approximately $16,000, a 2017 Toyota Rav 4 worth approximately $19,000, four Brookline Bank accounts holding less $2,500 and unprocessed credit card payments totaling approximately $45,000. In sum, the Debtor believes the total value of its assets is no more than $175,000, significantly less than the first priority secured claim against the Debtor asserted by the Massachusetts Department of Revenue. About Sale LLC Sale LLC -- https://asgoodasitgetscafe.com -- is a family-owned cafe with homestyle breakfasts & classic lunch eats, such as sandwiches, hamburgers, muffins, and pancakes. Sale LLC sought protection under Subchapter V of Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Mass. Case No. 23-10545) on April 10, 2023. In the petition signed by Abderrahim Hmina, manager, the Debtor disclosed $7,500 in assets and $3,127,759 in liabilities. The petition states that funds will not be available to unsecured creditors. David B. Madoff has been appointed as Subchapter V trustee. Judge Christopher J. Panos oversees the case. Marques C. Lipton, Esq., at Lipton Law Group, LLC, represents the Debtor. SAN BENITO HEALTH: Discusses Options for Future Financial Stability ------------------------------------------------------------------- Leaders for the San Benito Health Care District (District) voted to authorize obtaining a revolving line of credit to give the District flexibility to address its cash needs as meetings with potential partners continue. During the Board meeting, the District was presented with a detailed update on current finances and future considerations to ensure that access to local healthcare remains viable for residents of San Benito County. During the meeting, Seth R. Freeman, Managing Director of B. Riley Advisory Services, the financial consultant for the District, discussed the positive impacts of ongoing stabilization efforts. Freeman explained that the District's successful short-term stabilization efforts have been effective in mitigating the fiscal crisis declared in November 2022. However, he outlined the tools the District will consider adopting to form a long-term stabilization strategy to resolve systemic inefficiencies. The District's current projections indicate that cash on hand returns to critical levels in September 2023. "Remaining as an independent healthcare system requires hundreds of millions of dollars that the District does not have. There is limited working capital -- on average, much lower than other California Critical Access Hospitals and that has been the case since 2019. Add to this the COVID crisis, which depleted already limited cash reserves, and the additional financial pressures that faced the District in 2022, and it's a perfect storm of financial problems," said Freeman. Additionally, the District received advance payments to help stabilize the District's financing in the short term, which normally would be available later in the year. "The line of credit would serve both short-term and long-term goals for the District," said Mr. Freeman. "Approval tonight does not mean the District is taking the money today, but it can move forward knowing that if they need it, it's available." Over the long-term, however, the District and the Hospital still have several other options, which the Board is analyzing carefully. For several months now, the District has been conducting a thorough search for potential transaction partners, resulting in several interested parties coming forward. Negotiations are ongoing. The November 2022 fiscal emergency declaration gave the District the option to file bankruptcy before the end of 2022, but the District prioritized its short-term stabilization initiatives. However, the District may still utilize bankruptcy if determined necessary if it adopts a new resolution. A bankruptcy filing would allow the District to safeguard its assets, facilitate a transaction, or improve the long-term sustainability of the organization. This option is still on the table. Finally, but as a last resort, the District could reduce service offerings if it fails to decrease expenses or find a transaction partner. "We feel the process of closing a transaction with a partner will likely take us through the December 2023," said Mary Casillas, Interim-CEO for Hazel Hawkins. "This means we need to find more money through cost savings, and most likely utilizing a line of credit. We need more time to get to the finish line." Additionally, the District is still working with the State of California to help shore up finances, including meetings with lawmakers regarding pending legislation or other funding options. About Hazel Hawkins Memorial Hospital Hazel Hawkins Memorial Hospital -- http://www.hazelhawkins.com-- is a full-service, public agency hospital delivering modern medicine and compassionate care to the growing San Benito County community. HHMH offers hundreds of health services across multiple locations, including top-tier specialists, a modern Emergency Department, and a state-of-the-art Women's Center. SCIENTIFIC GAMES: S&P Downgrades ICR to 'B' on Delayed Deleveraging ------------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating to 'B' from 'B+' on Scientific Games Holdings L.P., and lowered all issue-level ratings one notch in line with the issuer credit rating downgrade. The stable rating outlook reflects S&P's expectation that good lottery demand will support relatively predictable revenue in 2023, and that cost inflation and supply chain challenges will begin moderating in a manner that will bring S&P Global Ratings-adjusted leverage to the high-7x area this year. S&P said, "Inflationary cost pressures and supply chain challenges have delayed our previously forecasted leverage improvement. As a result, we no longer expect S&P Global Ratings-adjusted 2023 leverage to improve below our 7x downgrade threshold. Despite growth in 2022 revenue given the stability of lottery sales, Scientific Games underperformed our revenue and EBITDA forecast as a result of significantly higher input prices, especially paper and ink, in its instant ticket business. Additionally, supply chain challenges in sourcing microchips in particular has led to contracted revenue being deferred into 2023 and 2024 as the company has been unable to complete contracted product sales in the originally expected timeframe. While we expect cost mitigation efforts implemented in 2022 and 2023 will begin to offset some of the inflationary cost pressures and the company will eventually be able to recognize deferred revenue as supply chain pressures abate, the company ended 2022 with S&P Global Ratings-adjusted leverage in the low-8x based on our estimates. (In our measure of leverage, we do not add back transaction and other restructuring costs, include cash distributions from joint ventures rather than joint venture EBITDA and do not net cash.) "The higher starting leverage at the end of 2022 combined with the time we expect it will take for the company to fully realize the cash flow benefit from its cost-mitigation efforts and new contracts will result in 2023 leverage that is approximately 1x higher than we previously forecast, and above our 7x threshold for the prior 'B+' issuer credit rating. In addition, the lower anticipated EBITDA and higher debt service costs in 2023 will probably translate into thin, but still positive, discretionary cash flow after amortization payments this year. Any inadvertent operating misstep or unexpected incremental macro or other risk factor, could result in negative cash flow generation compared to our base case. "Despite higher-than-anticipated leverage, we expect mitigating efforts the company has implemented to offset inflationary pressures on key inputs and supply chain challenges, along with new contract wins, will benefit cash flow in 2023 and 2024, and ultimately support deleveraging, albeit slower than we initially forecast. "Scientific Games faces risks from private equity ownership and the tendency of financial sponsors to use incremental leverage to fund acquisitions, investments, or cash distributions over time. Our assessment of the company's financial risk reflects corporate decision-making that could prioritize the interests of controlling owners, in line with our view of most rated entities owned by private-equity sponsors. Brookfield Business Partners, the private equity arm of Brookfield Asset Management, owns Scientific Games and controls the board of directors. However, our base-case forecast does not contemplate any material transactions in 2023 or 2024, as we expect the company will focus on continuing to implement mitigation efforts to offset input cost inflation and supply chain delays as well as executing on new contracts that are expected to begin over the next year. "Scientific Games' competitive position benefits from its leading position in instant tickets and long contracts with high renewal rates, which support fairly predictable recurring revenue. Scientific Games maintains a leading position in the global instant ticket market with a 69% global market share of instant game retail sales and a second-place position in the lottery systems market behind International Game Technology PLC (IGT). Scientific Games benefits from recurring revenue from long-term contracts with jurisdictions for instant tickets, lottery systems, and iLottery, which along with the stability of demand for lottery contracts, provides the company good revenue and cash flow visibility. Long-term contracts can result in operators becoming entrenched in governments' lottery ecosystem, resulting in high switching costs for governments and generally high contract renewal rates. Scientific Games has long-standing customer relationships with approximately 140 government and nongovernment lottery entities in over 50 countries. Scientific Games' top 10 customers as a percentage of 2022 revenue have an average relationship length of 35 years with the company and average current contract lengths of about 15 years. Despite these long-term and entrenched relationships, Scientific Games does not have material revenue concentration. Its top 10 customers account for less than half of its total revenue, and its largest customer accounted for only 15% of 2022 revenue. The remaining customers in its top 10 accounted for 5% or less of revenue. Scientific Games' good geographic and customer diversity can help mitigate some of the negative impact of a potential sales decline in a particular region or potential contract loss. Furthermore, we do not anticipate Scientific Games' high leverage will impair its relationships with its lottery customers, especially since the company's prior owner operated with very high leverage for a number of years. "The lottery industry is resilient over economic cycles and recovered faster from the pandemic than other gaming products. We view the lottery industry favorably given its long history of global revenue growth and resiliency in periods of economic stress, leading to less volatility compared to other leisure and gaming alternatives over an economic cycle. The lottery's stability is supported by the relatively low price points of lottery products and ease of access. Customers can purchase lottery products at grocery stores, gas stations, and convenience stores, compared to having to drive to a casino to gamble. These were also considered essential businesses in most countries and remained open during the pandemic. We believe the industry's growth will be supported over time given the habitual nature of lottery purchases for many consumers and since state and local governments often rely on lottery revenue as an important source of funding for education, health care, and other public programs. Furthermore, we expect over the next few years that more jurisdictions will legalize iLottery, which should support continued good revenue growth." Scientific Games benefits from high barriers to entry in its markets, but competition for lottery contracts and renewals can lead to upfront costs and pricing pressure. Lottery operators face complex regulatory and licensing requirements and require substantial upfront capital investment and expertise to put in place infrastructure and quality control measures to deliver lottery products at scale, including the ability to print millions of different tickets with an extremely high degree of accuracy. This limits the threat of new entrants. Notwithstanding the high barriers to entry in the industry, competition for new lottery contracts and renewals remains high among a small number of competitors, including Scientific Games, IGT PLC, Intralot, and Pollard. Intense competition for contracts, as well as governments' needs for additional funding to support their budgets, can result in pricing pressure. While lottery operators typically incur relatively modest levels of maintenance capital expenditures (capex), securing new contracts or renewals can be capital intensive because jurisdictions may require upfront payments to secure new contracts or renew existing ones, and lottery operators typically incur new contract or renewal capex to install or upgrade any required technology equipment. S&P said, "Nevertheless, we expect Scientific Games will continue to maintain its good position in the industry and particularly strong position within instant games. This is because of the additional value offered to customers through its Scientific Games Enhanced Partnership (SGEP) program, which uses analytics based on many years of data to customize and distribute a higher yielding product suite for a given contract. Scientific Games is focused on continuing to convert existing customers to the SGEP program, which we believe could drive higher-than-average instant ticket revenue growth. SGEP customers generate substantially higher per capita sales on average than non-SGEP customers, which benefits Scientific Games because of increased revenue participation under these contracts and benefits governments because of increased sales. "The stable rating outlook reflects our expectation that good lottery demand will support relatively predictable revenue in 2023, and that cost inflation and supply chain challenges will begin moderating in a manner that will drive S&P Global Ratings-adjusted leverage to the high-7x area this year. "We could lower the rating if we no longer expected leverage to decline below 8x over the next year. This would likely occur if EBITDA underperformed our forecast by about 5%. This would most likely be the result of weaker-than-expected lottery demand because of a more severe economic downturn, the inability to mitigate input cost inflation, and limited abatement in supply chain challenges that further delays the company's ability to deliver contracted revenue. Additionally, if inadvertent operating missteps or incremental macro or other risk factors result in sustained negative discretionary cash flow after amortization payments, we could lower the ratings. "We could also downgrade the company further if Scientific Games' owner aggressively pursued new contract acquisitions or other investments that increase leverage. Lastly, if the company were to pay dividends that resulted in leverage sustained above 8x, we would lower ratings. "We could raise the ratings if efforts to mitigate input cost inflation and supply chain challenges along with new contract wins, extensions, and conversions supported cash flow growth that drove leverage below 7x and we believed the company's financial sponsor's policy was aligned with maintaining leverage below that level." ESG credit indicators: E-2, S-3, G-3 S&P said, "Social factors are a moderately negative consideration in our credit rating analysis of Scientific Games. The company is exposed to regulatory risks, as it, like all lottery and gaming operators, faces a high degree of regulation across all the jurisdictions in which it operates. Scientific Games proved resilient during the pandemic, and its cash flows were less affected than more traditional gaming operators. This is because its products are mainly sold in essential businesses, including gas stations, convenience stores, and grocery stores, which did not close. Governance factors are also a moderately negative consideration, 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 controlling owners, typically with finite holding periods and a focus on maximizing shareholder returns." SCST REALTY: June 1 Plan & Disclosure Statement Hearing Set ----------------------------------------------------------- On April 24, 2023, 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. On April 25, 2023, Judge Jerrold N. Poslusny conditionally approved the Disclosure Statement and ordered that: * May 25, 2023 is fixed as the last day for filing and serving written objections to the Disclosure Statement and confirmation of the Plan. * May 25, 2023 is fixed as the last day for filing written acceptances or rejections of the Plan. * June 1, 2023 at 10:00am at the United States Bankruptcy Court, District of New Jersey, 400 Cooper Street Camden, NJ 08101 in Courtroom 4C is the hearing for final approval of the Disclosure Statement and for confirmation of the Plan. A copy of the order dated April 25, 2023 is available at https://bit.ly/3LEt4em 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. SHOPS@BIRD & 89: Case Summary & Two Unsecured Creditors ------------------------------------------------------- Debtor: Shops@Bird & 89, LLC 8950 Southwest 40th Street Miami, FL 33165 Business Description: The Debtor owns in fee simple title a property located at 8934-50 SW 40th Street, Miami, FL valued at $10 million. Chapter 11 Petition Date: April 28, 2023 Court: United States Bankruptcy Court Southern District of Florida Case No.: 23-13358 Judge: Hon. Robert A. Mark Debtor's Counsel: Robert C. Meyer, Esq. ROBERT C. MEYER, P.A. 2221 Coral Way, Second Floor Miami, FL 33145-3508 Tel: 305-285-8838 Email: meyerrobertc@cs.com Total Assets: $10,093,000 Total Liabilities: $5,577,772 The petition was signed by Jose Graibe as managing member. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/MORZQGQ/SHOPSBIRD__89_LLC__flsbke-23-13358__0001.0.pdf?mcid=tGE4TAMA List of Debtor's Two Unsecured Creditors: Entity Nature of Claim Claim Amount 1. IRS $0 Internal Revenue Service Atlanta, GA 39901-0029 2. Miami-Dade County $0 Tax Collector 200 NW 2nd Avenue Miami, FL 33128 SMILE HOMECARE: Seeks to Extend Exclusivity Period to November 21 ----------------------------------------------------------------- Smile Homecare Agency Inc. asks the U.S. Bankruptcy Court for the Eastern District of New York to extend its exclusive period to file a Plan of Reorganization and Disclosure Statement to November 21, 2023. The Debtor's exclusive period is currently set to expire on May 25, 2023. The Debtor explained that the requested extension will enable it to harmonize the diverse and competing interests that exist and seek to resolve any conflicts in a reasoned and balanced manner for the benefit of all parties in interest. Smile Homecare Agency Inc. is represented by: Alla Kachan, Esq. LAW OFFICES OF ALLA KACHAN, P.C. 2799 Coney Island Avenue, Suite 202 Brooklyn, NY 11235 Tel: (718) 513-3145 Email: alla @kachanlaw.com About Smile Homecare Agency Brooklyn, N.Y.-based Smile Homecare Agency Inc. is a provider of home care services. Smile Homecare Agency sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D.N.Y. Case No. 23-40233) on Jan. 25, 2023, with $539,257 in assets and $7,427,000 in liabilities. Ellen Verny, president of Smile Homecare Agency, signed the petition. Judge Elizabeth S. Stong oversees the case. The Debtor tapped the Law Offices of Alla Kachan, PC as bankruptcy counsel and Wisdom Professional Services, Inc. as accountant. SOUND INPATIENT: $610M Bank Debt Trades at 24% Discount ------------------------------------------------------- Participations in a syndicated loan under which Sound Inpatient Physicians Holdings LLC is a borrower were trading in the secondary market around 76.2 cents-on-the-dollar during the week ended Friday, April 28, 2023, according to Bloomberg's Evaluated Pricing service data. The $610 million facility is a Term loan that is scheduled to mature on June 28, 2025. About $593.8 million of the loan is withdrawn and outstanding. Sound Inpatient Physicians Holdings, LLC operates as a holding company. The Company, through its subsidiaries, provides healthcare services. STEAK & STONE: Wins Cash Collateral Access Thru June 8 ------------------------------------------------------ The U.S. Bankruptcy Court for the District of Arizona authorized Steak and Stone, LLC to use cash collateral on an interim basis in accordance with the budget, with a 10% variance, through June 8, 2023. The Court said no payment will be made to any professional in the case without an application to approve their employment first being approved by the Court and a further application for payment of fees and costs approved by the Court. The Debtor is authorized and directed to use cash collateral to remit $2,000 per month to the estate fiduciary account managed by the Subchapter V Trustee without regard to any amount set forth in the Operating Budget. Under no circumstances will ARF Financial, LLC have any lien on the Estate Fiduciary Account. As adequate protection, ARF Financial is granted valid and perfected security interests in the Debtor's postpetition assets. The Replacement Lien granted to ARF Financial (a) will secure repayment of the indebtedness owing to ARF Financial, but will be limited in amount to the diminution in value of ARF Financial's interest in collateral caused by the Debtor's use of Cash Collateral in which ARF Financial holds a valid security interest from and after the Petition Date; (b) will be evidenced by ARF Financial's existing loan and security documents and this Order; and (c) will have the same validity and priority as ARF Financial's existing security interests in the Debtor's assets as of the Petition Date. ARF Financial expressly reserves its right to assert a section 507(b) a superpriority claim if and to the extent the Replacement Liens are insufficient to provide adequate protection against the diminution, if any, in value of the ARF Financial's interest in any collateral resulting from the use of cash collateral. A final hearing on the matter is set for June 8 at 10 a.m. A copy of the Court's order and the Debtor's budget is available at https://bit.ly/40DHZtQ from PacerMonitor.com. The Debtor projects total expenses, on a weekly basis, as follows: $49,387 for Week 1; $9,814 for Week 2; $37,522 for Week 3; $30,183 for Week 4; and $30,611 for Week 5. About Steak and Stone, LLC Steak and Stone, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Ariz. Case No. 23-02243) on April 7, 2023. In the petition signed by David Storrs, owner, the Debtor disclosed up to $500,000 in assets and up to $10 million in liabilities. Jim Gaudiosi, Esq., at Jim Gaudiosi, Attorney at Law PLLC, represents the Debtor as legal counsel. STRUCTURLAM MASS: May 1 Deadline Set for Panel Questionnaires ------------------------------------------------------------- The United States Trustee is soliciting members for committee of unsecured creditors in the bankruptcy case of Structurlam Mass Timber U.S., Inc. If a party wishes to be considered for membership on any official committee that is appointed, it must complete a questionnaire available at https://bit.ly/3nhcqby and return by email it to Benjamin A. Hackman - Benjamin.A.Hackman@usdoj.gov - at the Office of the United States Trustee so that it is received no later than 4:00 p.m., on May 1, 2023. If the U.S. Trustee receives sufficient creditor interest in the solicitation, it may schedule a meeting or telephone conference for the purpose of forming a committee. About Structurlam Mass Structurlam Mass Timber U.S., Inc. is a manufacturer of mass timber solutions including cross laminated timber, Glulam beams, industrial matting and more. Structurlam Mass Timber U.S., Inc. and its affiliates sought Chapter 11 bankruptcy protection (Bankr. Del. Case No. 23-10497) on April 21, 2023. The Debtors listed $100 million to $500 million in both estimated assets and estimated liabilities. The petitions were signed by Shawn Turkington as authorized signatory. Potter Anderson & Corroon LLP serves as local bankruptcy counsel to the Debtors. Paul Hastings LLP serves as Debtors' General Bankruptcy Counsel. Gowling WLG serves as Debtors' Canadian Bankruptcy Counsel. The Debtors' financial advisor is Alvarez & Marsal Canada Inc.; investment bankers are Stifel, Nicolaus & Company, Incorporated and Miller Buckfire & Co. LLC; and Kurtzman Carson Consultants LLC is the notice and claims agent. SUREFUNDING LLC: Seeks to Extend Exclusivity Period to June 26 -------------------------------------------------------------- SureFunding, LLC asks the U.S. Bankruptcy Court for the District of Delaware to extend its exclusive periods to file a plan and disclosure statement and to solicit acceptances thereof to June 26, 2023 and August 28, 2023, respectively. The Debtor stated that while its bankruptcy case is not overly large or complicated, the underlying assets of the case are significant and complex, and based upon the complexity of the underlying facts and assets, the Debtor has required time to prepare adequate information. The Debtor also explained that, although the case was filed more than 3 years ago, substantially all of that time was engaged in litigation with the breaching noteholders, the majority of which was while the bankruptcy case was suspended, and the rest of the time the Debtor has been engaged in litigation with the breaching noteholders, who pursued an improper receivership action and filed multiple motions to convert or dismiss the case. Unless extended, the Debtor's exclusive filing period and exclusive solicitation period will end on April 25, 2023 and on June 25, 2023, respectively. SureFunding, LLC is represented by: Carl N. Kunz, III, Esq. Jeffrey R. Waxman, Esq. MORRIS JAMES LLP 500 Delaware Avenue, Suite 1500 Wilmington, DE 19801 Tel: (302) 888-6800 Email: ckunz@morrisjames.com jwaxman@morrisjames.com About SureFunding LLC Las Vegas-based SureFunding, LLC was founded by Jason and Justin Abernathy in 2014 as a private investment vehicle. It opened in 2015 to outside investors, many of which were family, friends and business acquaintances. Its investments are in short-term, high-yield assets. SureFunding sought Chapter 11 protection (Bankr. D. Del. Case No. 20-10953) on April 14, 2020, with $10 million to $50 million in both assets and liabilities. Judge Laurie Selber Silverstein oversees the case. The Debtor tapped Carl N. Kunz, III, Esq., and Jeffrey R. Waxman, Esq., at Morris James, LLP as bankruptcy attorneys; Carlyon Cica Chtd. as special litigation counsel; and Ted Gavin of Gavin/Solmonese, LLC as chief restructuring and liquidation officer. Bayard, P.A. represents the ad hoc committee of SureFunding noteholders. TALEN ENERGY: Announces Upsizing, Pricing of Sr. Notes Offering --------------------------------------------------------------- Talen Energy Corporation ("TEC") on April 28 disclosed that Talen Energy Supply, LLC ("TES" or the "Company"), a direct wholly owned subsidiary of TEC, has priced an offering of $1.2 billion in the aggregate principal amount of its 8.625% senior secured notes due 2030 (the "Notes"), pursuant to the Joint Chapter 11 Plan of Reorganization of Talen Energy Supply, LLC and its Affiliated Debtors (the "Plan"). The Company increased the aggregate principal amount of the Notes offered from the previously announced $825 million to $1.2 billion, and as a result of the increase of the total aggregate principal amount of the Notes, decreased (i) the aggregate principal amount of Exit Term B Loans to $580 million, from $825 million and (ii) the amount of additional equity capital of TEC raised in the backstopped equity rights offering to $1.4 billion, from $1.55 million. The offering is expected to close on May 12, 2023, subject to customary closing conditions. The gross proceeds of the Notes initially will be deposited and held in an escrow account (the "Escrow Account") until such amounts are released following the satisfaction of certain escrow conditions, including relating to the effective date of the Plan and the emergence of TEC and TES from bankruptcy (the date upon which all such conditions are satisfied, the "Completion Date"). If the escrow conditions are not satisfied or waived on or prior to the escrow outside date, the Notes will be subject to a special mandatory redemption at a redemption price equal to 100% of the gross proceeds of the Notes, plus accrued and unpaid interest to, but excluding, the redemption date. Concurrently with the Completion Date, the escrow funds will be released and the Company intends to use the net proceeds from the Notes, together with the anticipated proceeds from (i) the concurrently marketed new senior loan facilities (the "Exit Facilities") and (ii) the rights offering of TEC common stock, to fund the distributions provided for under the Plan, including the repayment of claims under the Company's Super Priority Senior Secured Debtor-In-Possession Credit Facility and the Company's existing first lien indebtedness, and to pay certain fees, commissions and expenses relating to the foregoing and the Company's emergence from bankruptcy and for general corporate purposes, which may include repayment of additional indebtedness. About Talen Energy Corp. Allentown, Pennsylvania-based Talen Energy Corp. is an independent power producer founded in 2015. Riverstone Holdings LLC completed its acquisition of the remaining 65% stake of Talen Energy in 2016 for $5.2 billion. Talen Energy Corporation, through subsidiary Talen Energy Supply LLC, is one of the largest competitive power generation and infrastructure companies in North America. Through subsidiary Cumulus Growth, TEC is developing a large-scale portfolio of renewable energy, battery storage, and digital infrastructure assets across its expansive footprint. On the Web: https://www.talenenergy.com/ TES owns and/or controls approximately 13,000 Megawatts of generating capacity in wholesale U.S. power markets, principally in the Mid-Atlantic, Texas and Montana. Woodlands, Texas-based TES runs 18 power generation facilities, at eight of which rely on natural gas to make electricity. Talen Energy Supply, LLC, and 71 affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 22-90054) on May 9, 2022. The Hon. Marvin Isgur is the case judge. Talen Energy Corporation (TEC), its Cumulus Growth subsidiary, and TES' LMBE subsidiaries are excluded from the in-court process. TES has retained Weil Gotshal & Manges LLP as its legal advisor, Evercore as its investment banker and Alvarez & Marsal as its financial advisor for its restructuring. Kroll is the claims agent. TEC is represented by PJT Partners as financial advisors and Vinson & Elkins as legal counsel. Cumulus Growth is represented by Ardea Partners and DH Capital as its investment bankers, and Gibson Dunn as legal counsel. The Consenting Noteholders are represented by Kirkland & Ellis LLP and Rothschild & Co US Inc. TKEES INC: Taps Fleit Gibbons Gutman Bongini as Special Counsel --------------------------------------------------------------- Tkees, Inc. seeks approval from the U.S. Bankruptcy Court for the Southern District of Florida to employ Fleit Gibbons Gutman Bongini & Bianco P.L. as special counsel for intellectual property matters. The firm will be paid at hourly rates ranging from $90 to $575 and will receive an advance payment of $6,400. As disclosed in court filings, Fleit is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached at: Paul D. Bianco, Esq. Fleit Gibbons Gutman Bongini & Bianco P.L. d/b/a Fleit Intellectual Property Law 21355 E. Dixie Highway, Suite 115 Miami, FL 33180 Tel: (305) 830-2600 Fax: (305) 830-2605 Email: pbianco@FleitlP.com About Tkees Inc. Tkees Inc. is a manufacturer and seller of sandals and flip flops for women. Tkees sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-12126) on March 20, 2023, with $1 million to $10 million in both assets and liabilities. Jesse Burnett, president of Tkees, signed the petition. Judge Scott M. Grossman oversees the case. The Debtor tapped Bradley S. Shraiberg, Esq., at Shaiberg Page PA as bankruptcy counsel and Fleit Gibbons Gutman Bongini & Bianco P.L. as special counsel. TOSCA SERVICES: $626.5M Bank Debt Trades at 27% Discount -------------------------------------------------------- Participations in a syndicated loan under which Tosca Services LLC is a borrower were trading in the secondary market around 73.3 cents-on-the-dollar during the week ended Friday, April 28, 2023, according to Bloomberg's Evaluated Pricing service data. The $626.5 million facility is a Term loan that is scheduled to mature on August 18, 2027. About $614.5 million of the loan is withdrawn and outstanding. Tosca Services, LLC manufactures and supplies container solutions. The Company offers plastic containers to transport fruit and vegetable, egg, poultry, meat, and cheese products. Tosca Services serves growers, suppliers, food manufacturers, and retailers in North America. TOTAL SAFETY: Moody's Cuts Secured Term Loan Rating to Caa1 ----------------------------------------------------------- Moody's Investors Service affirmed W3 Topco LLC's (Total Safety) B3 Corporate Family Rating and its B3-PD Probability of Default Rating and downgraded its senior secured term loan due in August 2025 to Caa1, from B3. The outlook remains stable. "The downgrade of Total Safety's senior term loan reflects the increased risk posed by structural subordination from the higher borrowing base and utilization of the company's ABL facility," said Jake Leiby, Moody's Senior Analyst. Affirmations: Issuer: W3 Topco LLC Corporate Family Rating, Affirmed B3 Probability of Default Rating, Affirmed B3-PD Downgrades: Issuer: W3 Topco LLC Backed Senior Secured Delayed Draw Term Loan, Downgraded to Caa1 from B3 Backed Senior Secured Term Loan, Downgraded to Caa1 from B3 Outlook Actions: Issuer: W3 Topco LLC Outlook, Remains Stable RATINGS RATIONALE The downgrade of Total Safety's senior secured term loan results from the increase in the ABL's borrowing base as the collateral pool has grown as well as the increase in borrowings under the facility over the past 12 months. The $110 million ABL revolver matures in August 2024 or 90 days prior to the maturity of the senior secured term loan and is subject to a borrowing base calculated as a portion of accounts receivable and inventory and ABL priority collateral that Moody's estimates is $100-110 million. Total Safety drew on its ABL revolver to fund working capital requirements as revenue grew in 2022, resulting in a higher amount of borrowings outstanding. Moody's does not expect Total Safety to meaningfully reduce its revolver balance over the coming 12 months. The higher borrowing base and borrowings outstanding increase the risks posed by the contractual and structural subordination of the senior secured term loan to the ABL revolver. Total Safety's B3 CFR reflects the company's geographic diversification and exposure to the relatively stable downstream energy market. These positive factors are partially offset by the company's moderate scale, exposure to the volatile oil and gas markets, and moderate customer concentration. Total Safety's leverage was elevated in late 2021 and early 2022 owing to challenging business conditions but improved during the second half of 2022 on stronger EBITDA generation. Moody's expects leverage to be around 5x at the end of 2023 with potential for further improvement if EBITDA continues to grow in 2024. Moody's also expects that Total Safety will proactively manage its refinancing requirements and maintain its adequate liquidity. Total Safety's adequate liquidity profile reflects Moody's expectations for the company to generate positive free cash flow into mid-2024. The company's cash flow generation is subject to some seasonality, however, manageable financing costs and low capital spending needs should allow the company to generate free cash flow. Total Safety had $9 million of cash on hand and around $35 million of availability under its revolver as of December 31, 2022. Extending the ABL's maturity and reducing the amount of borrowings outstanding would improve the company's liquidity profile, however, Moody's views Total Safety's existing liquidity as adequate to manage its day-to-day operations and debt service. The asset backed revolver includes a fixed charge financial covenant of no less than 1.0x, which would be triggered if availability under the revolver were to decline to 10%. Moody's does not expect the covenant to be triggered into mid-2024. The stable rating outlook reflects Moody's expectations for Total Safety's leverage to improve in 2023 and for it to maintain liquidity that is adequate to manage its business. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Sustained growth with annual EBITDA generation approaching $100 million and improving leverage with Debt/Ebitda below 4.5x could lead to an upgrade of the CFR. Deterioration in performance leading to rising leverage with Debt/EBITDA above 6x or more aggressive financial policies and/or an acquisition that increases financial or business risk, or deterioration in liquidity, could lead to a downgrade of the CFR. PROFILE W3 Topco LLC is a holding company controlling Total Safety U.S., Inc. (collectively "Total Safety"), a global provider of industrial safety services and equipment primarily for the upstream and downstream energy, petrochemical, chemical and other end markets. Total Safety is owned by affiliates of private equity sponsor, Littlejohn & Co. The principal methodology used in these ratings was Oilfield Services published in January 2023. TURBO COMPONENTS: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Turbo Components, Inc. 14680 Apple Drive Fruitport, MI 49415 Chapter 11 Petition Date: April 28, 2023 Court: United States Bankruptcy Court Western District of Michigan Case No.: 23-01005 Judge: Hon. James W. Boyd Debtor's Counsel: A. Todd Almassian, Esq. KELLER & ALMASSIAN, PLC 230 East Fulton Grand Rapids, MI 49503 Tel: 616-364-2100 Fax: 616-364-2200 Email: ecf@kalawgr.com Total Assets: $2,420,069 Total Liabilities: $4,647,278 The petition was signed by Brad Fortenbacher as president. A full-text copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/PXNO5QI/Turbo_Components_Inc__miwbke-23-01005__0001.0.pdf?mcid=tGE4TAMA UNITED FURNITURE: Properties to be Sold as Part of Bankruptcy ------------------------------------------------------------- Craig Ford of WTVA reports that United Furniture's properties in Northeast Mississippi and North Carolina are now up for sale nearly six months after the company suddenly shut down for good and left hundreds without work. Bids are being accepted for its plants, warehouses and other properties together, partially or individually as part of the company's Chapter 11 bankruptcy. The biggest building locally is the plant in Okolona, which takes up 626,500 square feet. The largest property companywide is its warehouse east of the city on 155 acres. Other local locations are in Amory, Belden, Nettleton, Tupelo and Vardaman. Here are the deadlines for the sale, according to B. Riley Real Estate: May 12, 2023 - stalking horse bid deadline May 19, 2023 - designation of stalking horses June 8, 2023 - deadline for bids on individual properties June 15, 2023 - bidders advised of qualified bids June 20, 2023 - proposed date of auction Stalking horse bidders are initially not disclosed to creditors and the courts, but they set the lowest bids that will be accepted. About United Furniture Industries United Furniture Industries, Inc. manufactures and sells upholstery. It offers bonded leather and upholstery fabric recliners, reclining sofas and loveseats, sectionals, and sofa sleepers, as well as stationary sofas, loveseats, chairs, and ottomans. United Furniture Industries was subject to an involuntary Chapter 7 bankruptcy petition (Bankr. N.D. Miss. Case No. 22-13422) filed on Dec. 30, 2022. The petition was signed by alleged creditors Wells Fargo Bank, National Association, Security Associates of Mississippi Alabama LLC, and V & B International, Inc. On Jan. 18, 2023, the court entered the order for relief, thereby, converting the case to one under Chapter 11. On Jan. 31, 2023, eight affiliates of United Furniture Industries filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Northern District of Mississippi. The affiliates are LS Logistics, LLC, Furniture Wood, Inc., UFI Transportation, LLC, United Wood Products, Inc., Associated Bunk Bed Company, FW Acquisition, LLC, UFI Royal Development, LLC, and UFI Exporter, Inc. Their Chapter 11 cases are jointly administered under Case No. 22-13422. Judge Selene D. Maddox oversees the cases. Wells Fargo is represented by R. Spencer Clift, III, Esq., while Security Associates is represented by Andrew C. Allen, Esq., at The Law Offices of Andrew C. Allen. Derek Henderson is the trustee appointed in the Debtors' Chapter 11 cases. The trustee hired McCraney, Montagnet, Quin, Noble, PLLC as bankruptcy counsel; King & Spencer, PLLC and NC Eminent Domain Law Firm as special counsel; Harper Rains Knight & Company as financial advisor; and B. Riley Real Estate, LLC as real estate advisor. UNITED PF: S&P Alters Outlook to Negative, Affirms 'CCC+' ICR ------------------------------------------------------------- S&P Global Ratings revised its outlook on United PF Holdings LLC (d/b/a United FP) to negative from stable and affirmed its 'CCC+' rating and all issue-level ratings. The negative outlook reflects our belief that the company's liquidity could become strained over the next 12-24 months. United FP amended its ADA with Planet Fitness to allow it to slow mandated club development through 2029. S&P understands the company will reduce its mandatory new club development schedule. At the same time, the ADA amendments will allow other Planet Fitness franchisees to develop clubs in some geographic areas where United FP formerly had exclusive rights. However, the company has maintained exclusive development rights within its largest core markets. S&P said, "We believe United FP's updated club development schedule will slow its cash burn over the next several years, as its newer clubs mature and mature club base expands membership toward levels from before the COVID-19 pandemic. As a result of these ADA amendments, we decreased our forecast for capex in 2023 to about $40 million from a $50 million-$60 million range. This incorporates a single new club build, mandatory club refreshes, and maintenance capex. We believe United FP has limited room to decrease capex more under its ADAs, and we view this as relatively close to its minimum 2023 capex. We also view its business profile as weaker given its reduced growth prospects over the next several years." S&P said, "Our 'CCC+' rating reflects our expectation for high leverage and thin liquidity even under a slowed club development schedule, partially offset by satisfactory revenue and EBITDA growth over the next several years. The company ended 2022 with S&P Global Ratings' lease-adjusted leverage of 10.5x. Even with an expectation for revenue growth in the 10% area and margin expansion to the mid- to high-30% area on a lease-adjusted basis compared to 34% in 2022, we expect leverage in the high-8x area in 2023. We also expect it will need to draw approximately $5 million-$10 million on its $40 million revolver due in December 2024 in the second half and could fully deplete its cash balances. Under our base-case forecast, United FP would only have access to about $14 million of its revolver because it would be unlikely to meet its springing 7x first-lien net leverage covenant otherwise. We believe that United FP's liquidity will be thin in late 2023 and early 2024, and the company could require a liquidity-enhancing transaction if it were to meaningfully underperform our base-case forecast. If it cannot sustain its liquidity position through this period, liquidity could become pressured again in the second half of 2024, when its revolver comes due and the interest rate caps on approximately $505 million of its floating-rate debt expire. This will likely result in an increase of approximately $20 million in debt service expense per year based on the current forward curve. "We believe United FP has recovered memberships more rapidly than higher-priced competitors, but slower than the Planet Fitness system as a whole. This is primarily due to competitive pressures and prolonged pandemic-related closures in some markets. United FP ended 2022 with memberships approximately 1.8% lower than in 2019. However, electronic fund transfer (EFT) billings were about 1% higher, which we believe is largely due to increased new black card dues, increasing EFT dues on average per member. Memberships have risen approximately 8% through March 2023 and are approximately 5.4% higher than at year-end 2019. EFT billings at clubs that opened prior to 2018 ended 2022 at 91% of 2019 levels. Given United FP's black card membership price increase in 2022, memberships at these locations have unlikely recovered slightly slower than EFT billings. We believe memberships at mature clubs remain depressed relative to 2019 and the Planet Fitness system as a whole, partially as a result of high competitive pressure in key markets such as Phoenix. Additionally, we believe prolonged club closures and mask mandates in some markets delayed customers' return to the gym more than the overall average. Furthermore, the company's clustering strategy in its largest markets may result in some cannibalization, whereby members may be joining newer clubs. "The company's Planet Fitness branding remains an asset. We believe that Planet Fitness' low-cost gym memberships, good brand recognition, and national-scale advertising campaigns remain strengths for United FP. United FP develops and operates Planet Fitness branded clubs that are economically efficient compared to peers, allowing United FP to offer membership plans starting at $10 per month, significantly less than the industry average. United FP has partially mitigated competition risk and benefiting from Planet Fitness' first-mover advantage." The negative outlook reflects our belief that United FP's liquidity could become strained over the next 12-24 months. S&P could lower the rating if we envisioned a specific default scenario over the subsequent 12 months such as a distressed exchange or conventional default. S&P could revise its outlook to stable if it believed the company could maintain adequate liquidity. S&P could raise its rating United FP if it believes it could comfortably cover fixed charges, including its obligations on its ADAs, and sustain leverage below 7x. ESG credit indicators: E-2, S-3, G-3 S&P said, "Social factors are a moderately negative consideration in our credit rating analysis of United FP. Low-cost gym memberships in general, including United FP's Planet Fitness-branded memberships, are recovering notably faster than high-cost gym memberships. However, we expect that a full recovery to pre-pandemic membership levels at the company's mature clubs could take until 2024. United FP and nearly all fitness operators were significantly affected by COVID-19 in terms of temporary gym closures, lower memberships, and revenue. Health and safety will remain an ongoing risk factor. Governance factors, on a net basis, are a moderately negative consideration. Our assessment of the company's financial risk profile as highly leveraged reflects corporate decision-making that prioritizes the interests of controlling owners, in line with our view of most rated entities owned by private-equity sponsors. Our assessment also reflects generally finite holding periods and a focus on maximizing shareholder returns." VALLEY PROPERTY: Taps Golden Goodrich as Legal Counsel ------------------------------------------------------ Valley Property Ventures, LLC seeks approval from the U.S. Bankruptcy Court for the Central District of California to employ Golden Goodrich, LLP as legal counsel. The Debtor requires legal counsel to: 1. give advice with respect to the requirements and provisions of the Bankruptcy Code, Federal Rules of Bankruptcy Procedure, Local Bankruptcy Rules, U.S. Trustee Guidelines, and other applicable requirements which may affect the Debtor; 2. assist the Debtor in preparing and filing schedules and statement of financial affairs, complying with and fulfilling U.S. Trustee requirements, and preparing other documents as may be required after the initiation of a Chapter 11 case; 3. assist the Debtor with the retention of one or more real estate brokers to assist in selling its properties; 4. assist the Debtor in selling the properties, including preparing the necessary pleadings for the court to approve the terms of any such sale, participating in any hearings before the court regarding the sale including any auction that may occur, and should the court approve the sale, taking actions necessary to close the sale; 5. assist the Debtor in negotiations with creditors and other parties; 6. assist the Debtor in the preparation of a disclosure statement and formulation of a Chapter 11 plan; 7. advise the Debtor concerning the rights and remedies of the estate and of the Debtor with respect to adversary proceedings, which may be removed to, or initiated in, the bankruptcy court; 8. prepare legal papers; 9. represent the Debtor in court proceedings or hearings; and 10. provide other necessary legal services. The firm's hourly rates range from $250 to $750, depending on the experience and expertise of the attorney or paralegal performing the work. David Goodrich, Esq., and Ryan Beall, Esq., the attorneys expected to handle the case, charge $650 per hour and $480 per hour, respectively. The firm received from the Debtor a retainer of $25,000. As disclosed in court filings, Golden Goodrich is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: David M. Goodrich, Esq. Ryan W. Beall, Esq. Golden Goodrich, LLP 650 Town Center Drive, Suite 600 Costa Mesa, CA 92626 Tel: (714) 966-1000 Fax: (714) 966-1002 Email: dgoodrich@go2.law shourany@go2.law About Valley Property Ventures Valley Property Ventures, LLC is a company in Palm Springs, Calif., engaged in activities related to real estate. Valley Property Ventures filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 23-10981) on March 15, 2023. In the petition filed by its manager, Erik Ivan Ochoa Gonzalez, the Debtor reported $1 million to $10 million in both assets and liabilities. Judge Scott H. Yun oversees the case. Golden Goodrich, LLP is the Debtor's bankruptcy counsel. VESTA HOLDINGS: Court Confirms Chapter 11 Liquidation ----------------------------------------------------- Vince Sullivan of Law360 reports that insurance brokerage Vesta Holdings LLC received bankruptcy court approval Friday, April 21, 2023, for its Chapter 11 plan of liquidation following the $125 million sale of its assets earlier this 2023. As reported in the TCR, Vesta Holdings, LLC, et al. submitted a Third Amended Combined Joint Chapter 11 Plan of Liquidation and Disclosure Statement. A copy of the Third Amended Combined Joint Chapter 11 Plan of Liquidation and Disclosure Statement dated March 15, 2023, is available at https://bit.ly/3ZWYNfD from PacerMonitor.com. In December 2022, the Debtors won approval of procedures to sell the substantially all of their assets. Pursuant to the Bidding Procedures, the stalking horse agreement with buyer RA Holdings, LLC, was subject to higher or better offers. The Debtors ultimately did not receive any qualified competing written offers on or before the deadline. Accordingly, the bid of RA Holdings was deemed the successful bid. On Jan. 20, 2023, the Bankruptcy Court entered an order approving the sale of the Debtors' assets to the Buyer pursuant to the Purchase Agreement. The sale to the Buyer is expected to close before the Confirmation Date. Under the Plan, Class 5 Unsecured Claims totaling $1,459,776 to $33,431,369 will recover 0 to 100% of their claims. Class 5 is impaired. About Vesta Holdings Historically, Vesta Holdings, LLC and each of its affiliates provided wealth advisory, risk management services, and insurance brokerage services to individual and corporate clients across the United States. In recent years, they have focused on growing their insurance brokerage services business, which is primarily operated under Summit Risk Advisors, LLC. Summit primarily concentrates on property and casualty insurance offerings. Vesta Holdings and its affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 22-11019) on Oct. 30, 2022. In the petitions signed by their chief financial officer, Michael Hines, the Debtors disclosed between $100 million and $500 million in both assets and liabilities. Judge Laurie Selber Silverstein oversees the cases. The Debtors tapped Ropes and Grapy, LLP and Potter Anderson & Corroon, LLP as bankruptcy counsels; Province, LLC as financial advisor; and Omni Agent Solutions, Inc., as claims, noticing and administrative agent. Colbeck Strategic Lending Offshore Mini-Master AIV, L.P., Colbeck Strategic Lending II Master, L.P., CION Investment Corporation and 34th Street Funding, LLC, as DIP Lenders, are represented by Akin Gump Strauss Hauer and Feld, LLP and Blank Rome, LLP. VESTA HOLDINGS: Joint Liquidating Plan Confirmed by Judge --------------------------------------------------------- Judge Laurie Selber Silverstein has entered findings of fact, conclusions of law and order confirming Joint Chapter 11 Plan of Liquidation of Vesta Holdings, LLC, and its Debtor Affiliates. The Plan provides adequate and proper means for the Plan's implementation, including Article VII (Means for Implementation of the Plan), Article VIII (Treatment of Executory Contracts and Unexpired Leases), Article X (The Liquidating Trust and the Liquidating Trustee), Article XI (Provisions Governing Distributions), and Article XII (Procedures for Resolving Contingent, Unliquidated and Disputed Claims and Interests), among other provisions of the Plan. The Plan, therefore, satisfies the requirements of section 1123(a)(5) of the Bankruptcy Code. The Plan has been proposed by the Debtors in good faith and in the belief that the proposed liquidation and other actions contemplated under the Plan will maximize value for the Debtors' creditors. The Plan has been proposed with the legitimate and honest purpose of implementing a chapter 11 liquidation of the Debtors and maximizing the value of the Estates to achieve the best interests of the Debtors' creditors. In so finding, the Court has considered the totality of the circumstances in the Chapter 11 Cases. The Plan provides for the liquidation of the Debtors' remaining assets and, accordingly, no further reorganization of the Debtors is contemplated. Accordingly, the Plan is the feasible. The Plan, therefore, satisfies the requirements of section 1129(a)(11) of the Bankruptcy Code. The various means for implementation of the Plan, as set forth in Article VII and other provisions of the Plan (collectively, the "Implementation Activities"), have been designed and proposed in good faith. The Implementation Activities are adequate and will promote the maximization of the value of the ultimate recoveries under the Plan in a fair and equitable manner in accordance with the priorities established by the Bankruptcy Code. A copy of the Plan Confirmation Order dated April 25, 2023 is available at https://bit.ly/3LEJV0I from Omni Agent Solutions, Inc., claims agent. About Vesta Holdings Historically, Vesta Holdings, LLC and each of its affiliates provided wealth advisory, risk management services, and insurance brokerage services to individual and corporate clients across the United States. In recent years, they have focused on growing their insurance brokerage services business, which is primarily operated under Summit Risk Advisors, LLC. Summit primarily concentrates on property and casualty insurance offerings. Vesta Holdings and its affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 22-11019) on Oct. 30, 2022. In the petitions signed by their chief financial officer, Michael Hines, the Debtors disclosed between $100 million and $500 million in both assets and liabilities. Judge Laurie Selber Silverstein oversees the cases. The Debtors tapped Ropes and Grapy, LLP and Potter Anderson & Corroon, LLP as bankruptcy counsels; Province, LLC as financial advisor; and Omni Agent Solutions, Inc. as claims, noticing and administrative agent. Colbeck Strategic Lending Offshore Mini-Master AIV, L.P., Colbeck Strategic Lending II Master, L.P., CION Investment Corporation and 34th Street Funding, LLC, as DIP Lenders, are represented by Akin Gump Strauss Hauer and Feld, LLP and Blank Rome, LLP. VYANT BIO: To Voluntarily Delist Shares From Nasdaq --------------------------------------------------- Vyant Bio, Inc. announced that on April 24, 2023 its Board of Directors determined it was appropriate to voluntarily delist its securities from The Nasdaq Capital Market. The Company has initiated the delisting and filed a Form 25 with the Securities and Exchange Commission and the delisting is expected to become effective on or about May 14, 2023. The Company previously filed post-effective amendments to six Registration Statements on Form S-8, four Registration Statements on Form S-3 and two Registration Statements on Form S-1 previously filed by the Company with the SEC, in each case, to remove from registration any unsold securities previously registered thereon. Following the delisting of the Company's securities from Nasdaq, the Company intends to file a Form 15 with the SEC to suspend its reporting obligations under the Securities Exchange Act of 1934, as amended. The Company expects that the deregistration of such securities will become effective 90 days after the filing of the Form 25 with the SEC. The Board made the decision to pursue this strategy following its review and careful consideration of a number of factors, including, but not limited to, the expected reduction in operating expenses by eliminating SEC reporting costs, which would allow the Company to focus more resources on its continued pursuit and exploration of satisfactory strategic alternative transactions and/or execution of an orderly wind down of the Company, if necessary. The Board determined that deregistration is in the overall best interests of the Company and its stockholders. The Company adopted a Cash Preservation Plan after engaging LifeSci Capital as its financial advisor approximately four months ago to explore strategic alternatives. Other cost-savings matters being pursued as part of the Company's overall Cash Preservation Plan have been workforce reductions, deferring clinical and preclinical activities, and reducing other expenses. The Company believes that the delisting is one more step consistent with its Cash Preservation Plan. The Company will continue to evaluate further steps to preserve cash pursuant to the Cash Preservation Plan. Following delisting of the Company's common stock from Nasdaq, the Company anticipates that the common stock will be quoted on the Pink Open Market operated by OTC Markets Group Inc. under the symbol "VYNT" starting on or about May 15, 2023. The Company intends to continue to provide information to its stockholders and to take such other actions within its control to enable its common stock to be quoted on the OTC Pink Open Market in the Pink Limited Information market tier. There is no guarantee, however, that a broker will continue to make a market in the common stock and that trading of the common stock will continue on an OTC market or otherwise. Going forward, Vyant Bio may, from time to time, when it deems appropriate, provide limited information regarding its financial status and business activities, or issue press releases for select events or developments. About Vyant Bio Headquartered in Cherry Hill, New Jersey, Vyant Bio, Inc. (formerly known as Cancer Genetics, Inc.) is an innovative biotechnology company reinventing drug discovery for complex neurodevelopmental and neurodegenerative disorders. Its central nervous system drug discovery platform combines human-derived organoid models of brain disease, scaled biology, and machine learning. Vyant Bio reported a net loss of $22.69 million for the year ended Dec. 31, 2022, compared to a net loss of $40.86 million for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $15.20 million in total assets, $5.30 million in total liabilities, and $9.91 million in total common stockholders' equity. Minneapolis, Minnesota-based Deloitte & Touche LLP, the Company's auditor since 2020, issued a "going concern" qualification in its report dated March 31, 2023, citing that the Company has suffered recurring losses and negative cash flows from operations since inception, has an accumulated deficit, has substantially ceased revenue generation, and is projecting insufficient liquidity to meet its obligations as they become due over the next twelve months, which raises substantial doubt about its ability to continue as a going concern. WEWORK INC: Two Proposals Passed at Special Meeting --------------------------------------------------- Wework Inc. held a special meeting of stockholders at which the stockholders: (1) adopted an amendment to the Second Amended and Restated Certificate of Incorporation to increase the total number of shares of Class A Common Stock, par value $0.0001 per share, that the Company will have authority to issue from 1,500,000,000 shares to 4,874,958,334 shares; and (2) approved, for purpose of the rules of the New York Stock Exchange, the potential issuance of more than 19.99% of the outstanding shares, including more than one percent of the outstanding shares to a Related Party, of Class A Common Stock and Class C Common Stock. As sufficient shares were voted in favor of the Authorized Shares Proposal and Stock Issuance Proposal, the proposal to adjourn the Meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies if there are insufficient votes to approve any of the proposals at the time of the Meeting was rendered moot and was not presented at the Meeting. About WeWork New York, NY-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. WHITTAKER CLARK: 4 Berkshire Entities Now in Chapter 11 ------------------------------------------------------- On December 14, 2007, an indirect subsidiary of Berkshire Hathaway Inc. acquired the equity of Whittaker, Clark & Daniels, Inc., Brilliant National Services, Inc., L.A. Terminals, Inc., and Soco West, Inc. These companies had ceased their operations in 2004 and sold all their operating assets prior to the acquisition, though they continued to face liabilities arising from asbestos, talc and environmental claims. No Berkshire company ever operated, or had any involvement in, the manufacturing and chemical operations that gave rise to the companies' liabilities, and no Berkshire insurer issued it any insurance in connection with the acquisition. On April 26, 2023, these companies filed voluntary petitions under chapter 11 of bankruptcy code in the United States Bankruptcy Court for the District of New Jersey. About Berkshire Berkshire Hathaway and its subsidiaries engage in diverse business activities including insurance and reinsurance, utilities and energy, freight rail transportation, manufacturing, retailing and services. Common stock of the company is listed on the New York Stock Exchange, trading symbols BRK.A and BRK.B. About Whittaker Clark Whittaker, Clark & Daniels, Inc., et al., were engaged in nonmetallic mineral mining and quarrying. Whittaker, Clark & Daniels, Inc., and affiliates Brilliant National Services, Inc., Soco West, Inc., and L.A. Terminals, Inc., sought Chapter 11 protection (Bankr. D.N.J. Lead Case No. 23-13575) on April 26, 2023. The Hon. Michael B. Kaplan is the case judge. The Debtors estimated $100 million to $500 million in assets against $1 billion to $10 billion in liabilities as of the bankruptcy filing. The Debtors tapped KIRKLAND & ELLIS LLP as general bankruptcy counsel; COLE SCHOTZ P.C. as co-bankruptcy counsel; and M3 PARTNERS LLC as financial advisor. STRETTO, INC., is the claims agent. WW INTERNATIONAL: $945M Bank Debt Trades at 31% Discount -------------------------------------------------------- Participations in a syndicated loan under which WW International Inc is a borrower were trading in the secondary market around 68.9 cents-on-the-dollar during the week ended Friday, April 28, 2023, according to Bloomberg's Evaluated Pricing service data. The $945 million facility is a Term loan that is scheduled to mature on April 13, 2028. About $942.6 million of the loan is withdrawn and outstanding. WW International, Inc., formerly Weight Watchers International, Inc., is a global company headquartered in the U.S. that offers weight loss and maintenance, fitness, and mindset services such as the Weight Watchers comprehensive diet program. YOAKUM ISD: Fitch Affirms 'BB' LongTerm IDR, Outlook Negative ------------------------------------------------------------- Fitch Ratings has affirmed the following Yoakum Independent School District (ISD), TX ratings at 'BB': - Long-Term Issuer Default Rating (IDR); - $2.3 million outstanding unlimited tax (ULT) refunding bonds, series 2015; - $8.3 million outstanding ULT refunding bonds, series 2017. The Rating Outlook is Negative. SECURITY The ULT bonds are payable from an unlimited annual property tax levy. ANALYTICAL CONCLUSION The 'BB' IDR reflects the district's diminished financial resilience as it continues to recover from a period of financial mismanagement that resulted in negative fund balances and a 'going concern' audit opinion in the last five fiscal years. The Negative Outlook reflects concern about the district's ability to sustain its recently improved liquidity. Resolution of the Negative Outlook is predicated on the district's cash-flow trends and the status of its financial resilience. Further deterioration in these areas would lead to a downgrade. The ratings incorporate the district's slow revenue growth prospects, moderate long-term liabilities and fixed costs. The rating also reflects an asymmetric economic risk consideration based on the high taxpayer and energy sector concentration within the district. Economic Resource Base Yoakum ISD is located about 100 miles east of San Antonio, TX in the counties of Dewitt, Lavaca, and Gonzales. With an economy historically based on agriculture, the district lies within the Eagle Ford shale, one of the most actively drilled targets for unconventional oil and gas in the U.S. Assessed valuation (AV) has exhibited volatility inherent in mineral-heavy areas but also surged due to the construction of a $650 million natural gas liquids (NGLs) processing plant that was completed in 2015. However, due to an eight-year tax abatement agreement, nearly the entire value of the processing plant was exempt for purposes of calculating the maintenance and operation (M&O) levy. Due to the abatement's expiration this year, AV surged by 83% in fiscal 2023, increasing the AV of the top ten taxpayers to 55% of total AV. KEY RATING DRIVERS Revenue Framework: 'bbb' Long-term revenue growth is expected to be in line with inflation based on the district's modestly declining enrollment trajectory balanced against Fitch's expectation of periodic increases in state per-pupil funding. The district's independent legal ability to raise revenues is limited by state law. Expenditure Framework: 'bbb' Pressured by a declining enrollment environment, natural spending growth is expected to be well above revenue growth. The fixed-cost burden for debt service and retiree benefits is moderate but the district's expenditure flexibility is considered only adequate as a prolonged period of right-sizing presents practical limits to the scale of additional cuts to core services. Long-Term Liability Burden: 'aa' Fitch expects the liability burden to rise to a moderate level based on the district's capital needs and upcoming bond election. Operating Performance: 'bb' The district's operating performance has stabilized but it still is constrained by its limited gap-closing capacity given its limited inherent budgetary flexibility and modest general fund reserves. ESG - Governance: Yoakum ISD has demonstrated poor financial operating and capital management, culminating in operational deficits and depletion of reserves resulting in prior negative balances and 'going concern' audit opinions. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Sustained reversal of negative enrollment trends, a principal driver for state funding, which would enhance revenue growth prospects; - Sustained balanced operations that stabilize operating performance and lead to larger operating reserves and increased financial resilience; - A continued trend of managing the pace of expenditure growth that aligns with the district's revenue growth prospects and improves the overall financial performance. - The Negative Outlook could be resolved upon improvement of the district's financial resilience. Factors that could, individually or collectively, lead to negative rating action/downgrade: - A return to a minimal cash position, operational deficits and negative reserves; - Delayed management information or audits, or continuation of auditor opinions noting a 'going concern' risk; - A material, sustained decline in district enrollment, leading Fitch to reassess the medium-term revenue growth prospects to below the rate of inflation. CURRENT DEVELOPMENTS District Budget Update With an unrestricted fund balance of $912,000 (5.3% of spending) in fiscal 2022, Yoakum ISD's financial position remains weak, although its reserves have improved from their previous negative levels in fiscal years 2018-2020. The dramatic drop in reserves from a peak of 34% of spending in fiscal 2014 is attributed to poor management of costs related to major capital improvement projects by the prior administration. The audits for fiscal years 2018-2022 retained an unqualified opinion, although they also stated there was "substantial doubt about the district's ability to continue as a going concern". Despite its weak financial health, the district has not declared financial exigency which would allow it to impose a mid-year reduction in force. Also, the Texas Education Agency (TEA) has not intervened to date. Modest improvement to the district's financial reserves did materialize in fiscal years 2021 and 2022 with net general fund surpluses of $2.4 million and $390,000, respectively, aided by continued right-sizing and the district's allocation of $3.69 million in Elementary and Secondary School Emergency Relief (ESSER) III. Uses of the ESSER III funds included summer school classes and HVAC improvements, leading to an improvement in the district's liquidity position to 42 days of governmental spending in fiscal 2022. The adopted fiscal 2023 budget projects essentially balanced results and is based on refined average daily attendance (ADA) of 1,376 which represents a 3.4% decline from the year prior. Management indicates that year-to-date refined ADA and expenditures are on track for balanced operations which would still result in modest financial reserves. Aided by the receipt of property taxes in January and February, the district reports a solid cash position of $6.4 million for all governmental funds as of April 25, 2023, equal to approximately 122 days of budgeted operations. Liquidity will likely trend downward through the fiscal year end as reliance shifts mostly to monthly state aid revenues although the imminent conclusion of the academic year will mitigate the scale of the decline in liquidity. The district's ability to maintain structural balance beyond fiscal 2023 may be challenged by the exhaustion of all ESSER III funds. Additionally, management expects the district to be designated as a Ch. 49 district next year which indicates the district will receive revenues in excess of entitlement per the school funding formula and may have to choose one of several options to reduce the district's revenue levels. The Ch. 49 designation is the direct result of the AV surge from the expiration of the tax abatement agreement with Enterprise Hydrocarbons LP which caused AV to spike by 83% in fiscal 2023. Among the options to reduce revenue levels is the purchase of ADA credits, which takes the form of recapture payments to the state. Such payments do not generally lead to structural imbalances but prevent districts from capturing the full value of its own resource base. ESG CONSIDERATIONS Yoakum ISD has an Environmental, Social, and Governance (ESG) Relevance Score of '5' for Rule of Law, Institutional & Regulatory Quality, Control of Corruption (GRL) due to poor financial operating and capital management, culminating in operational deficits and depletion of reserves resulting in prior negative balances and 'going concern' audit opinions. This position has a negative impact on the credit profile and is highly relevant to the rating and the Negative Outlook. 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. [*] Richard Klein Joins Hilco's Special Situations Department ------------------------------------------------------------- Hilco Corporate Finance (HCF), Hilco Global's investment banking advisory firm, has named Richard S. Klein a Senior Managing Director in its New York Office. Mr. Klein will further expand the range and experience of HCF's Special Situation and Restructuring Investment Banking services. With nearly 27 years of investment banking experience Mr. Klein has advised boards of directors, official and ad hoc creditors' committees, private equity sponsors, and various creditor constituencies on a wide array of restructurings, including Chapter 11 plans of reorganization, out-of-court restructurings, section 363 asset sales, rescue financings, and exchange offerings involving more than $75 billion of restructured liabilities. His industry experience spans aerospace and defense, consumer and retail, gaming, health care, industrials, restaurants, and technology. According to Teri Stratton, HCF's Senior Managing Director and National Practice Leader of Special Situations and Restructuring, "As HCF continues to expand the range and depth of its special situation advisory services, we are thrilled to add Rich to our team. He is a distinguished and talented investment banking leader with wide experience in all aspects of complex distressed corporate financial restructurings. With his depth of knowledge and broad network of relationships within the financial community, he has the ability to strengthen and grow our New York practice to meet the needs of our expanding client base." Mr. Klein commented, "I was drawn to the opportunity to join HCF and lead the expansion of its New York Office at this important time in the firm's development. I am very excited to be part of HCF's plan to provide industry leading advisory services in distressed and special situations." Geoffrey Frankel, the CEO of Hilco Corporate Finance, added, "Over the past 18 months, we have expanded our business by re-imagining how capital advisory services can best be provided to middle-market clients. From M&A advisory, to private capital markets services, to special situations and restructuring advisory, we are building our practice from the client's point of view – focusing on a solutions-oriented, not just transactional, approach. Rich understands and shares our passion for superior client-centric service for middle- market companies." Mr. Klein has represented creditors in some of the largest and most complicated restructurings including Adelphia Communications, Breitburn Energy, Caesars Entertainment Operating Company, Dean Foods, Frontier Communications, Gateway Casinos, GNC Holdings, Legacy Reserves, Overseas Shipholding Group, Patriot Coal, Sable Permian, and Seadrill. His notable company representations include Acis Capital Management, Agera Energy, Cobre del Mayo, Classic Party Rentals, Corner Bakery, LDK Solar Company, OnCure, Techniplas, TIMCO Aviation, and Vertellus Specialty Chemicals. Before joining HCF, Mr. Klein held senior positions in the restructuring and special situations investment banking practices of Raymond James, Miller Buckfire, and Jefferies. About Hilco Corporate Finance: Hilco Corporate Finance, LLC is a registered broker/dealer with the Securities and Exchange Commission and a member of FINRA (www.finra.com) and SIPC (www.sipc.org). Hilco Corporate Finance specializes in merger and acquisition advisory service, private capital markets, and special situations and restructuring advisory. Hilco Corporate Finance is the investment banking affiliate of Hilco Global. Hilco Global operates as a holding company comprised of over twenty specialized businesses and has nearly four decades of successfully acting as an advisor, agent, investor and/or principal in transactions. [^] BOND PRICING: For the Week from April 24 to 28, 2023 -------------------------------------------------------- Company Bid Price Coupon Maturity ------- --------- ------ -------- 99 Escrow Issuer Inc 38.500 7.500 1/15/2026 99 Escrow Issuer Inc 38.462 7.500 1/15/2026 99 Escrow Issuer Inc 38.462 7.500 1/15/2026 Acorda Therapeutics Inc 62.165 6.000 12/1/2024 Air Methods Corp 6.121 8.000 5/15/2025 Air Methods Corp 6.696 8.000 5/15/2025 Amyris Inc 23.984 1.500 11/15/2026 Apple Inc 99.961 2.400 5/3/2023 Applied Optoelectronics Inc 76.403 5.000 3/15/2024 Audacy Capital Corp 7.259 6.500 5/1/2027 Audacy Capital Corp 7.485 6.750 3/31/2029 Audacy Capital Corp 7.784 6.750 3/31/2029 Avaya Inc 9.875 6.125 9/15/2028 Avaya Inc 26.250 8.000 12/15/2027 Avaya Inc 27.000 6.125 9/15/2028 BPZ Resources Inc 3.017 6.500 3/1/2049 Bed Bath & Beyond Inc 2.526 5.165 8/1/2044 Bed Bath & Beyond Inc 2.700 3.749 8/1/2024 Bed Bath & Beyond Inc 3.875 4.915 8/1/2034 Brixmor LLC 10.275 6.900 2/15/2028 BuzzFeed Inc 65.000 8.500 12/3/2026 Citigroup Global Markets Holdings Inc/United States 82.300 8.500 5/17/2032 Citizens Financial Group Inc 85.750 6.000 N/A Clovis Oncology Inc 12.375 1.250 5/1/2025 Clovis Oncology Inc 11.717 4.500 8/1/2024 Clovis Oncology Inc 12.250 4.500 8/1/2024 Compass Minerals International Inc 97.291 4.875 7/15/2024 Compass Minerals International Inc 97.098 4.875 7/15/2024 County Bancorp Inc 96.768 5.875 6/1/2028 Diamond Sports Group LLC / Diamond Sports Finance Co 3.118 5.375 8/15/2026 Diamond Sports Group LLC / Diamond Sports Finance Co 5.000 5.375 8/15/2026 Diamond Sports Group LLC / Diamond Sports Finance Co 2.448 6.625 8/15/2027 Diamond Sports Group LLC / Diamond Sports Finance Co 3.118 5.375 8/15/2026 Diamond Sports Group LLC / Diamond Sports Finance Co 6.954 5.375 8/15/2026 Diamond Sports Group LLC / Diamond Sports Finance Co 6.750 5.375 8/15/2026 Diamond Sports Group LLC / Diamond Sports Finance Co 3.000 6.625 8/15/2027 Diebold Nixdorf Inc 26.271 8.500 4/15/2024 Diebold Nixdorf Inc 45.515 9.375 7/15/2025 Diebold Nixdorf Inc 45.611 9.375 7/15/2025 Diebold Nixdorf Inc 47.250 9.375 7/15/2025 Diebold Nixdorf Inc 45.611 9.375 7/15/2025 Diebold Nixdorf Inc 44.671 9.375 7/15/2025 Endo Finance LLC / Endo Finco Inc 5.000 5.375 1/15/2023 Endo Finance LLC / Endo Finco Inc 5.000 5.375 1/15/2023 Energy Conversion Devices Inc 0.551 3.000 6/15/2013 Envision Healthcare Corp 1.000 8.750 10/15/2026 Envision Healthcare Corp 2.597 8.750 10/15/2026 Esperion Therapeutics Inc 41.750 4.000 11/15/2025 Exela Intermediate LLC / Exela Finance Inc 12.404 11.500 7/15/2026 Exela Intermediate LLC / Exela Finance Inc 40.000 10.000 7/15/2023 Exela Intermediate LLC / Exela Finance Inc 11.866 11.500 7/15/2026 Exela Intermediate LLC / Exela Finance Inc 44.648 10.000 7/15/2023 First Citizens Bancshares Inc/TX 88.820 6.000 9/1/2028 First Citizens Bancshares Inc/TX 88.820 6.000 9/1/2028 First Commonwealth Bank 94.997 4.875 6/1/2028 GNC Holdings Inc 0.819 1.500 8/15/2020 General Electric Co 92.617 4.200 N/A Goodman Networks Inc 1.000 8.000 5/31/2022 Gossamer Bio Inc 25.375 5.000 6/1/2027 Groupon Inc 36.000 1.125 3/15/2026 Hope Bancorp Inc 99.290 2.000 5/15/2038 Inseego Corp 49.257 3.250 5/1/2025 Invacare Corp 1.625 5.000 11/15/2024 Invacare Corp 6.000 4.250 3/15/2026 JPMorgan Chase & Co 85.597 2.000 8/20/2031 JPMorgan Chase Bank NA 81.647 2.000 9/10/2031 Lannett Co Inc 5.541 7.750 4/15/2026 Lannett Co Inc 4.699 4.500 10/1/2026 Lannett Co Inc 5.850 7.750 4/15/2026 Liberty Interactive LLC 30.121 8.500 7/15/2029 Liberty Interactive LLC 19.500 4.000 11/15/2029 Liberty Interactive LLC 19.128 4.000 11/15/2029 Liberty Interactive LLC 17.136 3.750 2/15/2030 Liberty Interactive LLC 17.375 3.750 2/15/2030 Lightning eMotors Inc 53.841 7.500 5/15/2024 MBIA Insurance Corp 5.250 16.520 1/15/2033 MBIA Insurance Corp 2.000 16.562 1/15/2033 Macy's Retail Holdings LLC 87.697 6.900 1/15/2032 Macy's Retail Holdings LLC 87.697 6.900 1/15/2032 Mashantucket Western Pequot Tribe 42.000 7.350 7/1/2026 Morgan Stanley 74.360 1.800 8/27/2036 National CineMedia LLC 2.625 5.750 8/15/2026 National Rural Utilities Cooperative Finance Corp 96.704 4.750 4/30/2043 NiSource Inc 95.890 5.650 N/A OMX Timber Finance Investments II LLC 0.850 5.540 1/29/2020 Party City Holdings Inc 14.875 8.750 2/15/2026 Party City Holdings Inc 14.500 10.130 7/15/2025 Party City Holdings Inc 15.000 8.750 2/15/2026 Party City Holdings Inc 1.000 6.625 8/1/2026 Party City Holdings Inc 0.750 6.625 8/1/2026 Party City Holdings Inc 14.397 10.130 7/15/2025 Photo Holdings Merger Sub Inc 41.715 8.500 10/1/2026 Photo Holdings Merger Sub Inc 37.121 11.000 10/1/2027 Photo Holdings Merger Sub Inc 41.823 8.500 10/1/2026 Providence Health & Services Obligated Group 98.306 4.379 10/1/2023 Rackspace Technology Global Inc 23.924 5.375 12/1/2028 Renco Metals Inc 24.875 11.500 7/1/2003 Rite Aid Corp 33.430 7.700 2/15/2027 RumbleON Inc 36.373 6.750 1/1/2025 SVB Financial Group 7.000 4.250 N/A SVB Financial Group 6.998 4.100 N/A SVB Financial Group 8.000 4.000 N/A SVB Financial Group 7.750 4.700 N/A Shift Technologies Inc 12.125 4.750 5/15/2026 Signature Bancorporation Inc 94.161 5.950 6/1/2028 Signature Bancorporation Inc 94.161 5.950 6/1/2028 Signature Bank/New York NY 2.500 4.000 10/15/2030 Signature Bank/New York NY 1.357 4.125 11/1/2029 Talen Energy Supply LLC 31.125 10.500 1/15/2026 Talen Energy Supply LLC 30.875 6.500 6/1/2025 Talen Energy Supply LLC 43.250 7.000 10/15/2027 Talen Energy Supply LLC 43.750 6.500 9/15/2024 Talen Energy Supply LLC 22.970 6.500 9/15/2024 Talen Energy Supply LLC 36.250 9.500 7/15/2022 Talen Energy Supply LLC 33.000 10.500 1/15/2026 Talen Energy Supply LLC 22.793 9.500 7/15/2022 Talen Energy Supply LLC 31.508 10.500 1/15/2026 Team Health Holdings Inc 50.802 6.375 2/1/2025 Team Health Holdings Inc 51.843 6.375 2/1/2025 Team Inc 89.870 5.000 8/1/2023 TerraVia Holdings Inc 4.644 5.000 10/1/2019 Tricida Inc 10.750 3.500 5/15/2027 US Renal Care Inc 17.793 10.625 7/15/2027 US Renal Care Inc 19.562 10.625 7/15/2027 UpHealth Inc 30.733 6.250 6/15/2026 WeWork Cos Inc 51.322 7.875 5/1/2025 WeWork Cos Inc 52.430 7.875 5/1/2025 WeWork Cos LLC / WW Co-Obligor Inc 52.905 5.000 7/10/2025 WeWork Cos LLC / WW Co-Obligor Inc 52.699 5.000 7/10/2025 Wesco Aircraft Holdings Inc 8.864 9.000 11/15/2026 Wesco Aircraft Holdings Inc 3.763 8.500 11/15/2024 Wesco Aircraft Holdings Inc 2.921 13.125 11/15/2027 Wesco Aircraft Holdings Inc 11.875 8.500 11/15/2024 Wesco Aircraft Holdings Inc 8.095 13.125 11/15/2027 Wesco Aircraft Holdings Inc 9.278 9.000 11/15/2026 Western Global Airlines LLC 13.590 10.375 8/15/2025 Western Global Airlines LLC 15.440 10.375 8/15/2025 Zions Bancorp NA 79.000 5.800 N/A fuboTV Inc 41.750 3.250 2/15/2026 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. 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