/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/230529.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 29, 2023, Vol. 27, No. 148 Headlines 1111 INVESTMENT: Unsecured Creditors to Get Nothing in Plan 1325 ATLANTIC: Unsecureds Owed $612K Unimpaired in Plan 2202 EAST: Taps Law Offices of Raymond H Aver as Substitute Counsel 960 FRANKLIN: Court Confirms Chapter 11 Plan ADIRONDACKS PROTECTION: Unsecureds to Get 6% Under Plan ADJ PROPERTIES: No Funds Available for Unsecured Creditors ADVANCED PAIN: Taps SPS Consulting as Accountant ADVISOR GROUP: Fitch Hikes LongTerm IDR to 'B', Outlook Stable AHP HOME: Bid to Use Cash Collateral Denied as Moot AMERICANAS SA: Searches for Natural da Terra Unit Buyer ATHEN'S INC: Seeks Cash Collateral Access ATHENEX INC: Hopes to Get Bids in Chapter 11 Bankruptcy AVENTIV TECH: In Talks With Lenders to Sweeten $1.1-Bil. Debt Deal BED BATH & BEYOND: Pushes Sale Deadlines to Get Possible Buyer BENEFYTT INC: Court OKs $35MM DIP Loan from Wilmington BIRCHINGTON LLC: Reaches Deal to Exit Chapter 11 Bankruptcy BISHOP OF OAKLAND: U.S. Trustee Appoints Creditors' Committee BYJU'S ALPHA: Accused by Lenders of Hiding $500 Million CANOVA ELECTRICAL: Case Summary & 19 Unsecured Creditors CARETRUST REIT: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable CASH DEVELOPMENT: Ongoing Operations, Georgia Ops Sale to Fund Plan CATALENT INC: S&P Downgrades ICR to 'BB-', Outlook Negative CBAK ENERGY: Posts $2.2 Million Net Loss in First Quarter CELSIUS NETWORK: Fahrenheit Consortium Wins Auction for Assets CES ENERGY: DBRS Confirms B(high) Issuer Rating, Trend Stable CHASE HOME 2023-RPL1: DBRS Finalizes BB Rating on Class B-2 Certs CHENG & COMPANY: Banned from Using Cash Collateral CHENIERE ENERGY: Egan-Jones Retains CCC+ Senior Unsecured Ratings CHESTNUT RIDGE: Amends Plan to Include Unsecured Note Claims Pay CHIEF CORNERSTONE: Taps David J. Winterton & Assoc. as Counsel CLEAN HARBORS: Egan-Jones Hikes Senior Unsecured Ratings to BB+ COAST CAPITAL: DBRS Assigns BB(high) NVCC Sub Debt Rating COMM 2015-LC21: DBRS Confirms CCC Rating on Class F Certs CREW ENERGY: DBRS Hikes Issuer Rating to B(high), Trend Stable D FINDLEY: Seeks Court Approval to Hire Tax Professional DAVID'S BRIDAL: US Trustee Says Consultant Can't Bid in Chapter 11 DIOCESE OF ALBANY: Tort Panel Taps Saunders Kahler as Local Counsel DIOCESE OF SANTA ROSA: Taps Foley & Lardner as Litigation Counsel E.R. BAKEY: Wins Cash Collateral Access Thru June 6 ECHOSTAR CORP: Egan-Jones Retains BB- Senior Unsecured Ratings EDGEWELL PERSONAL: Egan-Jones Retains B Senior Unsecured Ratings EISNER ADVISORY: Fitch Affirms LongTerm IDR at 'B', Outlook Stable EMBARK TECHNOLOGY: Settles Investors' Suit, Sells to Applied ENDO INTERNATIONAL: Operand Entities' Chapter 11 Case Summary ESOURCE RESOURCES: Case Summary & 13 Unsecured Creditors FARAJI ENTERPRISE: Deal Allows Cash Collateral Use Thru June 30 FIRST REPUBLIC: Sen. Warren Slams Regulators Over Sale to JPMorgan FREE SPEECH: Court OKs Continued Cash Collateral Access FREE SPEECH: Judge Wants Chapter 11 Mediation Done by July FTX GROUP: Lawyers Sue Former Execs. Over $220M Embed Deal GAP INC: Egan-Jones Retains B+ Senior Unsecured Ratings GASPARILLA MOBILE: Taps Laura Trebing as Appraiser GRAYSON O CO: Court OKs Cash Collateral Access Thru July 7 GREEN ENVIRONMENTAL: Unsecureds Unimpaired in Plan HANNON ARMSTRONG: Fitch Alters Outlook on 'BB+' IDR to Positive HARSCO CORP: Egan-Jones Retains BB- Senior Unsecured Ratings HAWAIIAN HOLDINGS: Egan-Jones Retains CCC- Sr. Unsecured Ratings HAYWARD HOLDINGS: Case Summary & Two Unsecured Creditors HAYWARD INDUSTRIES: S&P Alters Outlook to Neg., Affirms 'BB' ICR HOLDINGS MANAGEMENT: Taps Saxton & Stump as Special Counsel HOUSTON AMERICAN: Incurs $104K Net Income in First Quarter IEH AUTO PARTS: Auto Plus Sale Okayed After First Bid Disqualified INCORA: Prepares for Bankruptcy Amid Missed Interest Payments INDEPENDENT PET: Unsecureds Will Get 11.4% of Claims in Plan INITALY LLC: Case Summary & Eight Unsecured Creditors INNOVATION PHARMACEUTICALS: Incurs $698K Net Loss in Third Quarter INTEGRATED VENTURES: Incurs $1.8 Million Net Loss in Third Quarter KDP LLC: Court OKs $450,000 DIP Loan from Obra KEITH STRANGE: Court OKs Interim Cash Collateral Access KIDDE-FENWAL: Removed from AFFF Case After Chapter 11 Filing LANDAMERICA FINANCIAL: Revived Bankruptcy Case Nears End LEAFBUYER TECHNOLOGIES: Posts $170K Net Loss in Third Quarter LTL MANAGEMENT: Mesothelioma Victims Oppose J&J's Proposal LUCKY BUCKS: Preps Up Possible Bankruptcy Filing LYM DEVELOPMENT: Court OKs Cash Collateral Access Thru June 14 MALLINCKRODT PLC: Lenders Organize Prior to Opioid Trust Payment MANCUSO MOTORSPORTS: Cash Collateral Access OK'd Thru July 28 MATLINPATTERSON GLOBAL: Liquidation Plan Confirmed by Judge METAL CHECK: Wins Cash Collateral Access Thru June 8 MILLIES PANCAKE: Seeks Cash Collateral Access NATIONAL CINEMEDIA: Unsecureds Owed $729M Get 0.03% in Plan NEW YORK INN: Wins Interim Cash Collateral Access NORTHERN OIL: Fitch Affirms LongTerm IDR at B, Outlook Positive NORTHWOODS PETS: Court OKs Interim Cash Collateral Access NOV INC: Egan-Jones Retains B+ Senior Unsecured Ratings P&P CONSTRUCTION: Court OKs Interim Cash Collateral Access PACKERS HOLDINGS: Fitch Alters Outlook on 'B-' IDR to Negative PARADOX RESOURCES: Court OKs Interim Cash Collateral Access PARAMOUNT RESTYLING: Court OKs Deal on Cash Collateral Access PEACE EQUIPMENT: Court OKs Cash Collateral Access Thru June 5 PEACE EQUIPMENT: Files Emergency Bid to Use Cash Collateral PLATFORM II LAWNDALE: Wins Cash Collateral Access Thru June 1 POLERCOASTER LLC: Says Royalty Payments to Satisfy Unsecured Claims PURDUE PHARMA: To Proceed Sale of Avrio Health Unit QUALITY HEATING: Wins Cash Collateral Access Thru June 8 QUALTEK LLC: S&P Downgrades ICR to 'D' Following Chapter 11 Filing RAW INDULGENCE: Files for Chapter 11 Bankruptcy Protection RAYONIER ADVANCED: Taps Goldman for Advice on Debt Refinancing RENNASENTIENT INC: Wins Interim Cash Collateral Access RHP HOTEL: Fitch Assigns BB+ Rating on New Loans ROBBINS SERVICE: Court OKs Cash Collateral Access Thru June 13 ROLLIN DIRTY: Seeks Cash Collateral Access Thru Nov 30 RYDER SYSTEM: Egan-Jones Retains BB+ Senior Unsecured Ratings SAM'S PLACE: Court OKs Cash Collateral Access Thru July 28 SEMRAD LAW: Court OKs Interim Cash Collateral Access SERTA SIMMONS: Settles Debt Blacklisting Dispute With Apollo SILICON VALLEY BANK: Ex-CEO Becker Declines to Give Up Pay STAGE LIGHTING: Court OKs Interim Cash Collateral Access STERICYCLE INC: Egan-Jones Retains B+ Senior Unsecured Ratings SYRACUSE INDUSTRIAL: Fitch Affirms 'C' Rating on 2016A/B Bonds TALEN ENERGY: Exits Chapter 11 With New Board and CEO TALKING TADPOLES: Court OKs Final Cash Collateral Access TJC SPARTECH: S&P Downgrades ICR to 'B-', Outlook Stable TOP LINE GRANITE: Court OKs Cash Collateral Access Thru June 29 TPC GROUP: Mid-County Residents Frustrated Over $30M Settlement TRONOX LIMITED: Egan-Jones Retains BB- Senior Unsecured Ratings TUESDAY MORNING: Cash Collateral Request Irks Lender UNION CIGAR: Court OKs Cash Collateral Access Thru Aug 25 VENTURE GLOBAL: Fitch Affirms LongTerm IDR at 'B', Outlook Stable VICE MEDIA: U.S. Trustee Appoints Creditors' Committee VIRGIN ORBIT: Shuts Down After Bankruptcy Sales VOYAGER DIGITAL: Gets Court Clearance to Liquidate, Repay Customers VOYAGER DIGITAL: Wind-Down Plan Approved by Court WAVECREST ENTERPRISES: Court OKs Cash Collateral Access Thru June 8 ZIP MAILING: Case Summary & 20 Largest Unsecured Creditors [^] BOND PRICING: For the Week from May 22 to 26, 2023 ********* 1111 INVESTMENT: Unsecured Creditors to Get Nothing in Plan ----------------------------------------------------------- 1111 Investment Holdings LLC filed with the U.S. Bankruptcy Court for the District of Nevada a Plan of Reorganization for Small Business dated May 21, 2023. The Debtor is an LLC. Since September 2014, the Debtor has been in the business of real estate property rental. This Plan of Reorganization proposes to pay creditors of the Debtor from the net proceeds of the short-term rental of Debtor's properties. Non-priority unsecured creditors holding allowed claims will receive distributions, which the proponent of this Plan has valued at approximately $0 cents on the dollar. This Plan also provides for the payment of administrative and priority claims. Class 1 consists of the Secured mortgage claim of Warwick castle an Oregon LLC, secured by the real property located at 125 E Harmon Ave 3116, Las Vegas, NV 89109. This claim shall be paid by Debtor pursuant to the terms of the existing contract, except that the maturity date of the claim shall be extended to June 1st, 2026. Class 2 consists of Secured mortgage claim of Warwick castle an Oregon LLC, secured by the real property located at 4381 W Flamingo Rd 3402, Las Vegas, NV 89103. This claim shall be paid by Debtor pursuant to the terms of the existing contract, except that the maturity date of the claim shall be extended to June 1st, 2026. Class 3 consists of Secured mortgage claim of Warwick castle an Oregon LLC, secured by the real property located at 4381 W Flamingo Rd 3404, Las Vegas, NV 89103. This claim shall be paid by Debtor pursuant to the terms of the existing contract, except that the maturity date of the claim shall be extended to June 1st, 2026. Class 4 consists of the Secured claim of Kismat Investments in the amount of $520,27. This Claim shall be paid $4,280 per month based on a 30-year amortization at 9.25% interest with a lump sum payment covering the remaining balance due on June 1st, 2028. Class 5 consists of non-priority unsecured creditors. Non-priority unsecured creditors shall not receive any distributions under this plan. This Class is impaired. Unsecured debt total $453,000. In accordance with Section 1123(a)(5) of the Bankruptcy Code, the Debtor's Chapter 11 Subchapter V Plan will be implemented by harnessing the revenues generated through its ongoing business operations. The restructuring process under this chapter intends to foster continued business activity and financial recovery, leveraging the company's income as the primary source of capital to satisfy creditor claims. The governance structure of the Debtor will remain intact with the current officers and directors, ensuring consistency and stability throughout the reorganization process. Specifically, Manish Patel, in his current role, will retain his duties as the managing member. This is a crucial factor, given his familiarity with the company's operations and strategic vision, thereby facilitating the effective implementation and eventual success of the Plan. The strategy focuses on adhering to the federal mandate to provide adequate means for the Plan's implementation while balancing the financial health and operational continuity of the Debtor. A full-text copy of the Plan of Reorganization dated May 21, 2023 is available at https://urlcurt.com/u?l=vKBcu5 from PacerMonitor.com at no charge. Attorney for the Plan Proponent: Seth D. Ballstaedt, Esq. Ballstaedt Law Firm, LLC d/b/a Fair Free Legal Services 8751 W. Charleston Blvd., Suite 220 Las Vegas, NV 89117 Telephone: (702) 715-0000 Facsimile: (702) 666-8215 Email: help@bkvegas.com About 1111 Investment Holdings Las Vegas-based 1111 Investment Holdings, LLC, is primarily engaged in renting and leasing real estate properties. 111 Investment Holdings filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No. 23-10596) on Feb. 20, 2023, with $500,000 to $1 million in assets and $1 million to $10 million in liabilities. Brian D. Shapiro has been appointed as Subchapter V trustee. Judge August B. Landis oversees the case. The Debtor is represented by Seth D. Ballstaedt, Esq., at Ballstaedt Law Firm, LLC. 1325 ATLANTIC: Unsecureds Owed $612K Unimpaired in Plan ------------------------------------------------------- 1325 Atlantic Realty LLC submitted a First Amended Disclosure Statement for Plan of Liquidation. The Debtor is a private New York limited liability company, 100% owned by Green 20 LLC. The Debtor's only asset is the property known as 1325-1339 Atlantic Avenue, Brooklyn, New York (the "Property"). The Debtor's Plan is a plan of liquidation. Under the Plan, Class 2 General Unsecured Claims totaling $612,160 are unimpaired. Each Holder of an Allowed General Unsecured Claim will receive one or more distributions on a pro-rata basis, 100% of such Allowed General Unsecured Claim, in full and final satisfaction of such Allowed General Unsecured Claim from the proceeds of the Property Sale or such other treatment as to which the Debtor and the holder of such Allowed General Unsecured Claim shall have agreed upon in writing. As a condition to the effectiveness of this Plan, the Debtor must close on the Property Sale. The Property Sale is intended to be exempt from otherwise applicable Transfer Taxes in accordance with Section 1146(a) of the Bankruptcy Code. The Debtor is authorized to structure the Property Sale pursuant to the terms of the Sale and Purchase Agreement so that it qualifies under the exchange provisions of Section 1031 of the Internal Revenue Code of 1986, as amended (a "Like-Kind Exchange"). Waldman agrees to cooperate with Debtor by taking such actions as are reasonably required to effectuate such a LikeKind Exchange, including but not limited to (i) the execution of any and all documents, either in customary form used by a qualified intermediary, or, subject to the reasonable approval of Waldman's counsel, as are requested in connection therewith; and (ii) the use of a qualified intermediary. The Plan and the Distributions hereunder shall be funded by the net proceeds of Property Sale provided that the Priority Tax Claims, the Property Tax Claims and a portion of U.S. Trustee fees, shall be satisfied by the BHG Claimants pursuant to the terms of the BHG Settlement Agreement. Notwithstanding anything to the contrary in the Plan or related settlement agreements: (i) the Debtor shall remain liable for all quarterly fees pursuant to 28 U.S.C. sec. 1930 and for timely paying such fees on the dates they become due; and (ii) all payments that constitute "disbursements" under 28 U.S.C. sec. 1930 shall be included in the calculation of quarterly fees that are due pursuant to 28 U.S.C. sec. 1930. (a) In accordance with Section 1123(b) of the Bankruptcy Code and Rule 9019, the filing of the Plan shall constitute a motion for an order of the Bankruptcy Court approving, and the Confirmation Order shall constitute the Bankruptcy Court's approval of, the Debtor's entry into and performance under the BHG Settlement Agreement, attached to the Plan as Exhibit A and incorporated therein by reference, and the Sale and Purchase Agreement, attached to the Plan as Exhibit B and incorporated therein by reference, and all documents ancillary or executed in connection with the foregoing and the Debtor's taking all actions necessary or appropriate to consummate the transactions contemplated thereby, as fair and equitable and in the best interests of the Debtor's Estate. Pending the closing of the Property Sale, the Debtor shall be authorized to continue to operate, maintain and preserve the Property. On or before the Effective Date, the Debtor may file with the Bankruptcy Court such agreements and other documents as may be necessary or appropriate to effectuate or further evidence the terms and provisions of the BHG Settlement Agreement and the Sale and Purchase Agreement and related agreements. (b) The consummation of the closing of the Property Sale is a transfer under, pursuant to, in connection with and in furtherance of the Plan, and the Confirmation Order will provide that such sale, transfer and delivery of any and all instruments of transfer, including, without limitation, the applicable deed, in connection therewith shall not incur any Transfer Taxes as permitted by Section 1146(a) of the Code as interpreted by the Supreme Court in Florida Department of Revenue v. Piccadilly Cafeterias, Inc., 128 S.Ct. 2326 (2008). (c) The Debtor is authorized to structure the Property Sale pursuant to the terms of the Sale and Purchase Agreement so that it qualifies under the exchange provisions of Section 1031 of the Internal Revenue Code of 1986, as amended (a "Like-Kind Exchange"). Waldman agrees to cooperate with Debtor by taking such actions as are reasonably required to effectuate such a Like-Kind Exchange, including but not limited to (i) the execution of any and all documents, either in customary form used by a qualified intermediary, or, subject to the reasonable approval of Waldman's counsel, as are requested in connection therewith; and (ii) the use of a qualified intermediary. As stated in the Disclosure Statement Approval Order, the Bankruptcy Court has scheduled a hearing to consider final approval of this Disclosure Statement and Confirmation of the Plan for June 27, 2023 at 3:30 p.m. Holders of Claims and other parties in interest may attend this hearing. Objections to confirmation of the Plan and final approval of the Disclosure Statement must be filed on or before June 20, 2023 at 4:00 p.m. as set forth in the Disclosure Statement Approval Order. The terms of the Sale & Purchase Agreement are summarized as follows: -- The sale of the Debtor's Fee Interest in the Property, subject to the Leasehold Interest, in exchange for thirteen million two hundred thousand dollars ($13,200,000.00). Each of the following shall remain the sole obligations of BHG under the terms of the Lease, and the Debtor shall have no obligations in regard to any of the following: (i) any and all existing property taxes and (ii) all mechanics liens allowed by the Bankruptcy Court. -- The Purchase Price shall be paid by Waldman, or his designees and assigns, at the closing, which shall take place on a day and at a time which is not more than sixty (6) days after the Bankruptcy Court enters an order confirming the Plan. -- The Property shall be sold, conveyed and assigned, and Waldman, or his designees and assigns, shall purchase the Property subject to: (i) the terms and conditions of the Confirmation Order; (ii) any and all existing property taxes; (iii) all allowed mechanics liens; (iv) BHG's rights in the Leasehold Interest and any of Debtor's obligations under the Leasehold Interest; and (v) such title exceptions affecting the Premises and Leasehold Interest as the Title Company or any other reputable title insurance company licensed to do business in the State of New York. Counsel to the Debtor: Tracy L. Klestadt, Esq. Christopher J. Reilly KLESTADT WINTERS JURELLER SOUTHARD & STEVENS, LLP 200 West 41st Street, 17th Floor New York, NY 10036 Tel: (212) 972-3000 Fax: (212) 972-2245 A copy of the Disclosure Statement dated May 19, 2023, is available at bit.ly/436bqGu from PacerMonitor.com. About 1325 Atlantic Realty 1325 Atlantic Realty, LLC, a company in Lakewood, N.J., filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 22-40277) on Feb. 16, 2022, with up to $50 million in assets and up to $10 million in liabilities. Esther Green, manager, signed the petition. Judge Nancy Hershey Lord oversees the case. Klestadt Winters Jureller Southard & Stevens, LLP and Levine & Associates, P.C. serve as the Debtor's bankruptcy counsel and special litigation counsel, respectively. 2202 EAST: Taps Law Offices of Raymond H Aver as Substitute Counsel ------------------------------------------------------------------- 2202 East Anderson Street, LLC seeks approval from the U.S. Bankruptcy Court for the Central District of California to employ the Law Offices of Raymond H. Aver, A Professional Corporation to substitute for the Law Offices of Stephen F. Biegenzahn. The firm's services include: a. representing the Debtor at hearings before the bankruptcy court; b. preparing legal papers; c. advising the Debtor regarding matters of bankruptcy law, including its rights and remedies with respect to its assets and the claims of its creditors; d. representing the Debtor in contested matters; e. representing the Debtor with regard to the preparation of a disclosure statement and the negotiation, preparation, and implementation of a plan of reorganizations; f. analyzing secured, priority or general unsecured claims; g. negotiating with the Debtor's secured and unsecured creditors regarding the amount and payment of their claims; h. objecting to claims as may be appropriate; i. other necessary legal services. Raymond Aver, Esq., the main attorney who will be handling the bankruptcy case, will be paid at the rate of $550 per hour and will be reimbursed for out-of-pocket expenses incurred. The retainer is $10,000. Mr. Aver disclosed in a court filing that his firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached at: Raymond H. Aver, Esq. Law Offices of Raymond H. Aver 10801 National Boulevard, Suite 100 Los Angeles, CA 90064 Tel: (310) 571-3511 Email: ray@averlaw.com About 2202 East Anderson Street 2202 East Anderson Street, LLC, a Los Angeles-based company, filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 23-11695) on March 23, 2023, with $1 million to $10 million in both assets and liabilities. Susan K. Seflin has been appointed as Subchapter V trustee. Judge Neil W. Bason oversees the case. The Debtor is represented by Raymond H. Aver, Esq., at the Law Offices of Raymond H. Aver. 960 FRANKLIN: Court Confirms Chapter 11 Plan -------------------------------------------- Jil Mazer-Marino has entered an order approving the Disclosure Statement of 960 Franklin Owner LLC on a final basis as containing adequate information within the meaning of 11 U.S.C Sec. 1125 (a)(1) and confirming the Debtor's Plan. Any and all objections to the Disclosure Statement and the Plan not previously resolved or withdrawn, whether filed or not, are overruled. The Court rules that the Plan meets each of the requirements of Section 1129(a). The Restructuring Transaction contemplated by the Amended and Restated Restructuring Support Agreement is approved, and each provision of the Amended and Restated Restructuring Support Agreement is authorized and approved in its entirety. Notwithstanding any provision of the Plan, the Plan does not release any alleged liens or claims asserted by Haim Kahan against the Property and 960 Franklin LLC, including the alleged lien and claims set forth in the action pending in the Supreme Court of the State of New York and captioned as Haim Kahan v. 960 Franklin LLC, Index No. 536153/2022 ("Kahan Action") nor does the Plan release, cancel or otherwise invalidate the Notice of Pendency filed in connection with the Kahan Action which shall be adjudicated in the New York Courts. As reported in the TCR, the Plan of Reorganization provides for the Debtor's restructuring. The implementation of the Plan is based on the appointment of a Plan Administrator who will be empowered to (i) execute a 99-year ground lease of the Property with Franklin Plaza II LLC post-confirmation, (ii) encumber or authorize Franklin Plaza II LLC to encumber the ground lease with the Leasehold Mortgage, (iii) encumber of the Property with the Property Mortgage, and (iv) the subsequent transfer of the Property subject to the ground lease. Upon confirmation of the Joint Plan, the Debtor's beneficial 51% membership interest in 960 Franklin shall be irrevocably assigned to the Plan Administrator and held by the Plan Administrator in escrow for the purposes of either (i) selling the Property at Hagler's direction, or (ii) assigning the Debtor's beneficial 51% ownership interest in 960 Franklin to Hagler or his designee. About 960 Franklin Owner 960 Franklin Owner, LLC, is a limited liability company formed to acquire a 51% membership interest in 960 Franklin LLC, with an obligation to purchase the remaining interests. 960 Franklin LLC owns the property designated at Block 1192, Lots 41 and 46 in Kings County, New York, and premises designated as Block 1192, Lot 40, in Kings County, New York. 960 Franklin Owner filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 22-42760) on Nov. 2, 2022, with up to $50,000 in assets and $10 million to $50 million in liabilities. David Goldwasser, manager, signed the petition. Judge Jil Mazer-Marino presides over the case. Mark Frankel, Esq., at Backenroth Frankel & Krinsky, LLP, is the Debtor's legal counsel. ADIRONDACKS PROTECTION: Unsecureds to Get 6% Under Plan ------------------------------------------------------- Adirondacks Protection Services LLC of the Plan of Reorganization for Small Business Under Chapter 11. The Plan Proponent's financial projections show that the Debtor will have projected disposable income (as defined by sec. 1191(d) of the Bankruptcy Code) for the period described in sec. 1191(c)(2) of $22,982.00. The final Plan payment is expected to be paid on June 2026. The Debtor recently learned that it will be receiving a new contract that will pay $4,689.81 weekly. This new contract begins in May 11, 2023. It is anticipated that it will continue alongside the existing contract. Non-priority unsecured creditors holding allowed claims will receive distributions, which the proponent of this Plan has valued at approximately 0.06 cents on the dollar. Under the Plan, Class 3 Non-priority Unsecured Creditors will be paid from the Debtor's future income over 36 months with an estimated distribution of approximately 6%. Class 3 is impaired. This Plan will be funded by future income generated by the business as anticipated in the projections. A copy of the Plan of Reorganization dated May 19, 2023, is available at bit.ly/3Mphjrv from PacerMonitor.com. About Adirondacks Protection Services Adirondacks Protection Services, LLC sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 22-11536) on Nov. 20, 2022, listing $50,001 to $100,000 in assets and $100,001 to $500,000 in liabilities. The case was transferred to the U.S. Bankruptcy Court for the Eastern District of New York and was assigned a new case number (Bankr. E.D.N.Y. Case No. 22-42927). Adrienne Woods, Esq., at The Law Offices of Adrienne Woods, P.C. serves as the Debtor's legal counsel while Vernon Consulting, Inc. is the Debtor's financial advisor and accountant. ADJ PROPERTIES: No Funds Available for Unsecured Creditors ---------------------------------------------------------- ADJ Properties, LLC and ALJ Properties, LLC submitted a Combined Liquidating Plan and Disclosure Statement. Both ADJ and ALJ are single-asset real estate entities ("SARE"). ADJ owns property at 31816 Utica Road, Fraser Michigan ("31816 Utica Road"), consisting of a banquet hall and adjoining parking lot. ALJ owns the adjacent property at 31490 Utica Rd, Fraser Michigan ("31490 Utica Road") consisting of a wedding chapel to compliment the ADJ banquet facilities (collectively, 31816 Utica Road and 31490 Utica Road shall be referred to as the "Real Estate"). The Debtors' sole source of income is generated from the rents collected from its only tenant, Vintage. The Plan provides for liquidation of the Debtors and for the creation of 5 groups and 3 classes of claims. Under the Plan, Class II shall consist of the Allowed General Unsecured Claims of creditors of the Debtors, to the extent such exist, including trade debt and Huntington's deficiency claim. The Debtors do not anticipate that there will be funds available for a distribution to the Class II creditors. The Debtors have limited non-priority unsecured claims consisting of traded debt totaling $2,119.49. Huntington will have a deficiency claim the value of which has not been determined. The Debtors have received three offers to purchase the Real Estate along with the business operations and operating assets of Vintage. An offer of $1,800,000.00 paid at closing and an offer of $4,000,000.00 paid over 36 months have been presented. HRG Capital made an offer for $3,500,000.00 to be paid at closing (the "HRG Offer"). The HRG Offer has been accepted as the highest and best offer. The Debtors' principal has been marketing the Real Estate and Vintage operations for approximately 18 months and has not received a higher or better viable offer than the HRG Offer. The Debtors anticipate filing a motion for approval of a private sale based on the HRG Offer. The proceeds from the sale of the Real Estate and the Vintage operations will fund the payments required under the Plan. Attorneys for the Debtors: Lynn M. Brimer, Esq. Pamela S. Ritter, Esq. STROBL PLLC 33 Bloomfield Hills Parkway, Suite 125 Bloomfield Hills, MI 48304-2376 Telephone: (248) 540-2300 Facsimile: (248) 645-2690 E-Mail: lbrimer@strobllaw.com pritter@strobllaw.com A copy of the Combined Liquidating Plan and Disclosure Statement dated May 19, 2023, is available at bit.ly/42Y6S5s from PacerMonitor.com. About ADJ Properties ADJ Properties LLC and ALJ Properties, LLC are each a Single Asset Real Estate (as defined in 11 U.S.C. Sec. 101(51B)). ADJ Properties LLC and ALJ Properties, LLC filed for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. E.D. Mich. Case No. 22-48074 and 22-48075) on Oct. 17, 2022. In the petition filed by Anthony Jekielek, as member, ADJ reported assets and liabilities between $1 million and $10 million. The Debtors are represented by attorneys at Strobl Sharp PLLC. ADVANCED PAIN: Taps SPS Consulting as Accountant ------------------------------------------------ Advanced Pain Medicine Institute, P.C. seeks approval from the U.S. Bankruptcy Court for the District of Maryland to employ SPS Consulting, LLC as its accountant. The Debtor requires an accountant to: a. prepare financial statements required for the Chapter 11 bankruptcy proceedings; b. assist in the preparation of any amended schedules and other financial disclosures required by the court; c. assist in the preparation of financial projections and a liquidation analysis necessary for the Debtor's Chapter 11, Subchapter V plan; d. assist the Debtor with its books and records in preparation for the filing of tax returns. The firm will be paid at these rates: Senior Manager $225 per hour Staff Accountant $80 per hour Toby Studley, president of SPS Consulting, disclosed in a court filing that the firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached at: Toby Studley SPS Consulting, LLC 1901 Research Boulevard, Suite 320 Rockville, MD 20850 Tel: (301) 652-9112 About Advanced Pain Medicine Institute Advanced Pain Medicine Institute, P.C. is a provider of medical services in Chevy Chase, Md. Advanced Pain Medicine Institute filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. D. Md. Case No. 23-12359) on April 5, 2023, with up to $500,000 in assets and up to $10 million in liabilities. Lawrence A. Katz, Esq., at Hirschler Fleischer, PC has been appointed as Subchapter V trustee. Judge Lori S. Simpson oversees the case. The Debtor tapped Stephen A. Metz, Esq., at Offit Kurman, PA as legal counsel and SPS Consulting, LLC as accountant. ADVISOR GROUP: Fitch Hikes LongTerm IDR to 'B', Outlook Stable -------------------------------------------------------------- Fitch Ratings has upgraded Advisor Group Holdings, Inc.'s (Advisor Group) Long-Term Issuer Default Rating (IDR) to 'B' from 'B-', senior secured debt ratings to 'B+'/'RR3' from 'B'/'RR3' and senior unsecured debt rating to 'CCC+'/'RR6' from 'CCC'/'RR6'. The Rating Outlook is Stable. KEY RATING DRIVERS The upgrade reflects Advisor Group's declining leverage levels given the earnings benefit from recent acquisitions and higher net yields on cash sweep deposits; improving market position as one of the largest independent financial advisors in the U.S.; and enhanced product and revenue diversification, given recent acquisition activity. Advisor Group continues to integrate its late 2022 acquisitions of American Portfolios and Infinex and has been successfully executing on planned revenue and expense synergies. The ratings also reflect the cash-generative business model; relatively flexible cost base, which should help cushion revenue declines in downward market environments; and high advisor retention rates. The ratings are constrained by weak, albeit improving, interest coverage metrics; relatively low EBITDA margin; highly competitive environment associated with the independent broker-dealer and registered investment advisor (Hybrid RIA) business model; and challenges presented by the volatile economic environment. Advisor Group's ratings are also constrained by its private equity ownership, which introduces a degree of uncertainty over the company's future financial policies and the potential for more opportunistic growth strategies. Advisor Group's cash flow leverage, as expressed by gross debt to EBITDA (adjusted for non-cash and non-recurring items) was 4.9x in 2022, down from 7.8x a year ago, and within Fitch's 'b' benchmark category range of 3.5x-5.0x. Fitch's expectation is that while Advisor Group will continue to make bolt-on acquisitions, but funding associated with these transactions will not materially alter the firm's leverage profile, as revenue added and potential synergies are expected to offset offset said funding. Advisor Group's four-year average EBITDA margin was 11% from 2019-2022; at the low end of Fitch's 'bb' category quantitative benchmark range of 10%-20% for securities firms with low balance sheet usage. On a gross revenue basis, margins remain structurally low due to high production-based payouts to advisors. Advisor Group's EBITDA margin improved to 15.6% in 2022, due to higher net interest income on cash balances held in sweep accounts, which has benefited from the higher interest rate environment, partially offsetting lower revenues linked to market performance. Fitch expects Advisor Group's adjusted EBITDA margin to gradually improve, supported by its enhanced operating scale, a growing proportion of higher fee-generating assets on the proprietary advisory platform and further cost optimizations. Advisor Group's asset performance, as reflected by net assets under administration (AUA) flows, was negative 0.3% in 2022, and has averaged negative 2.2% for the last four years (2019-2022). While market valuation was a headwind to flows, the firm continued to report organic growth on its proprietary advisory platform, which Fitch views favorably. Interest coverage (EBITDA/interest expense) increased to 2.9x in 2022, up from 1.9x a year ago, due to improved earnings, and was at the high end of Fitch's 'b' category benchmark range of 1.0x-3.0x for securities firms with low balance sheet usage. Advisor Group's lower coverage metrics are partially offset by the relatively long-term maturity profile of the firm's debt (nearest maturity is in 2026) and the cash generative business model. Fitch expects further improvement in interest coverage to due to EBITDA increases from the recent acquisitions and organic growth. Fitch believes Advisor Group has a sound liquidity profile, with cash and equivalents of approximately $496 million at YE 2022 and a fully undrawn secured revolving credit facility $450 million. This compares to approximately $15 million of annual debt amortization requirements. The Stable Outlook reflects Fitch's expectation that Advisor Group will manage its leverage and interest coverage ratios near current levels, maintain good operating performance and continue to grow AUA. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - An ability to sustain leverage at-or-below 4.0x through market cycles; - Sustained maintenance of interest coverage at-or-above 3x; - Sustained maintenance of the EBITDA margin approaching 15%; - Consistently positive AUA flows and the continued shift of assets onto the advisory platform; and/or - Maintenance of an adequate liquidity profile. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Deterioration in operating results that prevent Advisor Group from maintaining leverage at-or-below 5.5x; - A weakened liquidity profile and/or a sustained reduction in interest coverage below 2.0x; - Sustained operational losses and a reduction in the EBITDA margin below 10%; - Sustained negative AUA flows; - A material decline in advisor and asset retention rates; and/or - A material increase in balance sheet-intensive activities. The secured and unsecured debt ratings are primarily sensitive to changes in Advisor Group's Long-Term IDR and secondarily to relative recovery prospects for each class of debt under a stress scenario. ESG CONSIDERATIONS Advisor Group Holdings, Inc. has an ESG Relevance Score of '4' for Governance Structure due to Private Equity ownership which could result in more opportunistic financial policies and higher leverage tolerance which has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Advisor Group Holdings, Inc. LT IDR B Upgrade B- senior unsecured LT CCC+ Upgrade RR6 CCC senior secured LT B+ Upgrade RR3 B AHP HOME: Bid to Use Cash Collateral Denied as Moot --------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida, Jacksonville Division, denied the motion to use cash collateral filed by AHP Home Health Care, Inc., based upon the confirmation of the Debtor's SubChapter V Chapter 11 Plan. As previously reported by the Troubled Company Reporter, the Debtor sought authority to use cash collateral to continue operating the business and pay salaries. As of the Petition Date, the Debtor was indebted to WBL SPE III, LLC in the approximate amount of $65,000 total, without prejudice to WBL asserting a higher amount owed through the claims process. The Debtor's obligation is secured and is evidenced by a Promissory Note, Security Agreement, Financing Statement, and Chattel Mortgage executed on or about February 27, 2015 to WBL. A copy of the order is available at https://urlcurt.com/u?l=bN0YA2 from PacerMonitor.com. About AHP Home Health Care Inc. Headquartered in Jacksonville, Florida, AHP Home Health Care, Inc. filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 23-00166) on January 25, 2023. In the petition signed by Charlene Austin, chief executive officer, the Debtor disclosed up to $500,000 in assets and up to $100,000 in liabilities. Judge Jacob A. Brown oversees the case. Bryan K. Mickler, Esq., at the Law Offices of Mickler & Mickler, LLP, represents the Debtor as legal counsel. AMERICANAS SA: Searches for Natural da Terra Unit Buyer ------------------------------------------------------- Alex Vasquez of Bloomberg New reports that Americanas SA said in a statement Thursday, May 18, 2023, that it will start the process to evaluate interested parties in the acquisition of the Hortifruti Natural da Terra business unit. The company hired Citigroup Global Markets Brasil, Corretora de Cambio, Titulos e Valores Mobiliarios SA as its financial advisor for conducting the market sounding process to reach interested parties. Americanas said it has received "unsolicited approaches from parties potentially interested in Ame's operations and, at that moment, took the decision to start a process of evaluating strategic alternatives for the business, which may involve preliminary contacts with potential interested parties." About Americanas SA Americanas was one of the largest diversified retail chains in Brazil, with a wide platform of physical stores, robust e-commerce, fintech, and has just entered into the niche food retail. It is listed on B3, being indirectly controlled by billionaire Jorge Paulo Lemann, Carlos Alberto Sicupira and Marcel Telles. The retailer nosedived in January 2023 after becoming mired in an accounting scandal. The firm filed for bankruptcy at a court in Rio de Janeiro on Jan. 19, 2023. Americanas sought protection under Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 23-10092) on Jan. 25, 2023. White & Case LLP, led by John K. Cunningham, is the U.S. counsel. ATHEN'S INC: Seeks Cash Collateral Access ----------------------------------------- Athen's Inc. asks the U.S. Bankruptcy Court for the District of Nevada for authority to use cash collateral in accordance with its agreement with the U.S. Small Business Administration. Pre-petition, on or about June 17, 2020, the Debtor executed a Note, pursuant to which the Debtor obtained an loan in the amount of $86,900. The terms of the Note require the Debtor to pay principal and interest payments of $424 every month beginning 12 months from the date of the Note over the 30-year term of the SBA Loan, with a maturity date of June 18, 2050. The SBA Loan has an annual rate of interest of 3.75% and may be prepaid at any time without notice of penalty. As evidenced by a Security Agreement executed in connection with the SBA Loan, and a validly recorded UCC-1 filing on July 1, 2020 as Filing Number 2020110647-3, the SBA Loan is secured by all tangible and intangible personal property. On August 1, 2021, the Debtor executed a First Modification of Note, pursuant to which the Debtor increased the SBA Loan to the amount of $377,600. The Modified Note, in pertinent part, requires the Debtor to pay principal and interest payments of $1,898 every month, beginning 24 months from the date of the original Note over the 30-year term of the SBA Loan. On August 17, 2021, the Debtor executed a Second Modification of Note, pursuant to which the Debtor increased the SBA Loan to the amount of $500,000. The Second Modified Note, in pertinent part, requires the Debtor to pay principal and interest payments of $2,472 every month, beginning 24 months from the date of the original Note over the 30-year term of the SBA Loan. The Debtor, on August 17, 2021, executed an Amended Security Agreement to reflect the increased loan amount reflected in the Second Modified Note. On January 19, 2022, the Debtor executed a Third Modification of Note, pursuant to which the Debtor increased the SBA Loan to the amount of $1.258 million. The Second Modified Note, in pertinent part, requires the Debtor to pay principal and interest payments of $6,200 every month, beginning 24 months from the date of the original Note over the 30-year term of the SBA Loan. The Debtor, on January 19, 2022, executed an Amended Security Agreement to reflect the increased loan amount reflected in the Third Modified Note. Pursuant to the SBA Proof of Claim, the sum of $1.4 million is the cumulative balance owing on the SBA Loan as of the Petition Date. The SBA consents to the Debtor's use of cash collateral. Other than the Debtor's use of cash collateral, the Debtor represents to the SBA that it will make no additional or unauthorized use of the cash collateral retroactive from the earlier of the SBA Loan date until entry of an Order Confirming the Debtor's Plan of Reorganization for ordinary and necessary expenses as set forth in the projections, which will not vary more than 10% on a total-disbursements cumulative basis and 20% per line-item basis. As adequate protection, the SBA will receive a replacement lien to the extent the automatic stay, pursuant to 11 U.S.C. section 362, as well as the use, sale, lease or grant results in a decrease in the value of the SBA's interest in the Personal Property Collateral on a post-petition basis. The replacement lien is valid, perfected and enforceable and will not be subject to dispute, avoidance, or subordination, and this replacement lien need not be subject to additional recording. The SBA is authorized to file a certified copy of the cash collateral order and any other necessary and related documents to further perfect its lien. Any diminution in the value of Personal Property Collateral pursuant to the SBA Loan over the life of the proceeding will entitle the SBA to a super-priority claim pursuant to 11 U.S.C. sections 503(b), 507(a)(2) and 507(b). The Debtor will timely commence making regular monthly payments to the SBA in accordance with the deadlines and amounts set forth in the applicable SBA Loan documents. The Debtor agrees to maintain insurance on the Personal Property Collateral and designate SBA as a loss payee or additional insured in accordance with the SBA Loan and related loan documents and agrees to provide proof of insurance within seven days upon the SBA's written request. These events constitute an "Event of Default": (a) The failure to maintain property insurance; (b) The conversion of the Debtor's Bankruptcy Case to any other chapter; or (c) The dismissal of the Debtor's bankruptcy case. The Stipulation remains in effect until May 31, 2023, or until the Parties enter into an amended Stipulation or a consensual Chapter 11 Plan, or until the case is converted or dismissed, whichever first occurs. A copy of the Debtor's motion and budget is available at https://urlcurt.com/u?l=b883P8 from PacerMonitor.com. The Debtor projects total expenses, on a monthly basis, as follows: $85,584 for May 2023; $83,097 for June 2023; $74,396 for July 2023; $89,294 for August 2023; and $88,006 for September 2023. About Athen's Inc. Athen's Inc. filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No. 23-11659) on April 27, 2023. In the petition signed by Anthony Dobbs, president, the Debtor disclosed $793,698 in total assets and $2,890,982 in total liabilities. Judge Natalie M. Cox oversees the case. The Debtor tapped Candace C. Carlyon, Esq., at Carlyon Cica Chtd. as counsel and Symphony Business Services LLC as accountant. ATHENEX INC: Hopes to Get Bids in Chapter 11 Bankruptcy ------------------------------------------------------- Jonathan Randles of Bloomberg Law reports that Athenex Inc., a developer of cancer therapies financially backed by Oaktree Capital Management LP, will attempt to sell all or parts of its business in Chapter 11 by the end of June, a company lawyer said late Tuesday, May 16, 2023. Athenex marketed its business before filing Chapter 11 on May 14, 2023 but hasn't been able to attract buyers for its various business lines, company bankruptcy lawyer Richard Pachulski said during a court hearing. Pachulski said Athenex and its advisers hope Chapter 11 will entice bids because potential buyers will be able to acquire business assets without risk of assuming liabilities. About Athenex Inc. Founded in 2003, Athenex, Inc. (NASDAQ: ATNX) -- http://www.athenex.com/-- is a clinical-stage biopharmaceutical company dedicated to becoming a leader in the discovery, development, and commercialization of next-generation cell therapy products for the treatment of cancer. The Company's mission is to become a leader in bringing innovative cancer treatments to the market and to improve patient health outcomes. In pursuit of this mission, Athenex leverages years of experience in research and development, clinical trials, regulatory standards, and manufacturing. The Company is focused on its innovative Cell Therapy platform, based on natural killer T ("NKT") cells. Athenex Inc. sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-90295) on May 14, 2023. In the petition filed by Nicholas K. Campbell, as chief restructuring officer, the Debtor reported assets and liabilities between $100 million and $500 million. Pachulski Stang Ziehl & Jones LLP is acting as Athenex's legal counsel. MERU is serving as its financial advisor and Cassel Salpeter & Co., LLC as its investment banker. AVENTIV TECH: In Talks With Lenders to Sweeten $1.1-Bil. Debt Deal ------------------------------------------------------------------ Paula Seligson, Jeannine Amodeo and Gowri Gurumurthy of Bloomberg News report that private equity firm Platinum Equity is in discussions with lenders about potential changes to sweeten a $1.1 billion bond-and-loan deal that would refinance near-term debt at its prison phone and tablet company Aventiv Technologies LLC, according to people with knowledge of the matter. Negotiations are ongoing for the $700 million leveraged loan and $400 million junk-bond offering, the people said, asking not to be named discussing private information. Commitments for the loan part of the package were due on May 12, 2023. About Aventive Technologies Carrollton, Texas-based Aventiv Technologies LLC is a diversified technology company that provides innovative solutions to customers in the corrections and government services sectors. Aventiv is the parent company to Securus Technologies and AllPaid, leading providers of innovative products and services. BED BATH & BEYOND: Pushes Sale Deadlines to Get Possible Buyer -------------------------------------------------------------- Amelia Pollard of Bloomberg Law reports that Bed Bath & Beyond pushed out deadlines for several steps in its bankruptcy sale process for some or all of its assets, according to court filings. The bankrupt retailer now has ten additional days to select a stalking horse bidder, with the new deadline slated for June 1. Meanwhile, its sale hearing is now two weeks later than originally planned, with the new date on June 21, 2023. The company pushed out the dates "given the need for additional time to ensure the most value maximizing transaction is achieved," according to the filing. 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 Frares & 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. BENEFYTT INC: Court OKs $35MM DIP Loan from Wilmington ------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, authorized Benefytt Technologies, Inc. to use cash collateral and obtain postpetition financing. The Debtors obtained senior secured postpetition financing on a superpriority basis, consisting of: (i) a superpriority delayed draw term loan facility in an aggregate principal amount of up to $35 million, as contemplated by the Restructuring Support Agreement dated as of May 23, 2023; provided that (x) an initial draw in the principal amount of up to $25 million will be made available to the Debtors upon entry of the Interim Order, and (y) the remaining undrawn portion of the DIP Facility will be made available to the Debtors upon entry of the Final Order, all on the terms and subject to satisfaction of the conditions set forth in the DIP Documents, the Interim Order, and the DIP Budget; and (ii) a new money letter of credit subfacility with aggregate commitments to issue up to $4 million of new letters of credit of which all will be available immediately upon entry of the Interim Order. Phoenix 2023 Merger Sub LLC is the guarantor and Wilmington Savings Fund Society, FSB is the administrative agent and collateral agent under the Debtor-in-Possession Credit Agreement. The DIP Facility terminates through the earliest to occur of: (a) The date that is six months after the Court's entry of the Interim Order and satisfaction of all of the applicable conditions precedent; (b) The date that is 45 days after the Petition Date if the Final Order has not been entered prior to the expiration of such 45-day period, unless otherwise extended by the Required DIP Lenders; (c) The substantial consummation of a plan of reorganization filed in the Chapter 11 Cases that is confirmed pursuant to an order entered by the Bankruptcy Court; (d) The acceleration of the Loans and the termination of the DIP Commitments with respect to the DIP Facility in accordance with the DIP Credit Agreement; and (e) The consummation of a sale of all or substantially all of the assets of the Borrower (or the Borrower and the Guarantors) pursuant to 11 U.S.C. section 363. The Debtors are required to comply with these milestones: (a) Entry of the Interim Order approving entry into the Facilities on an interim basis will occur within three days following the Petition Date; (b) Entry of the Final Order approving entry into the Facilities on a final basis will occur within 35 days following the Petition Date; (c) Entry of an order approving a disclosure statement for a chapter 11 plan of reorganization reasonably acceptable to the Sponsor, the Required Consenting Revolving Credit Facility Lenders and the Required Consenting Term Lenders will occur within 45 days following the Petition Date; (d) Entry of an order confirming an Acceptable Plan will occur within 105 days following the Petition Date; and (e) The Restructuring Effective Date will occur within 135 days following the Petition Date. The Debtors require the use of cash collateral and DIP Facility (i) for working capital and general corporate purposes of the Debtors, (ii) to pay obligations arising from or related to the Carve Out, (iii) to pay Allowed Professional Fees, (iv) to pay Adequate Protection Obligations, and (v) to pay fees and expenses incurred in connection with the transactions contemplated hereby in accordance with the DIP Documents. Pursuant to the Credit Agreement, dated as of August 12, 2021, by and among the Company, Holdings, the guarantors party thereto, Ares Capital Corporation, as administrative agent, Truist Bank, as priority revolving agent and swing line lender, the lenders party thereto Ares Capital Management LLC, Truist Securities, Inc., as joint lead arrangers, and Ares Capital Management LLC, as lead bookrunner, which provided: (i) a $400 million term loan facility; (ii) a $100 million five-year revolving credit facility including a $10 million sublimit for the issuance of standby letters of credit and a $5 million sublimit for swingline loans; and (iii) a $100 million delayed draw term loan facility. Each of the Prepetition Credit Documents is valid, binding, and enforceable in accordance with its terms. As of the Petition Date, the Company and the Prepetition Guarantors were indebted to the Prepetition Secured Parties, in respect of the Prepetition Credit Facilities in the aggregate outstanding amount of no less than $622.5 million. As adequate protection for the use of cash collateral, the Prepetition Secured Parties, are granted allowed superpriority administrative expense claims as provided for in 11 U.S.C. section 507(b) in the amount of the Prepetition First Lien Adequate Protection Claim. As further adequate protection, the Prepetition Revolving Agent, on behalf of the Prepetition Revolving Lenders, will receive monthly adequate protection payments, payable in cash on the 30th day of each month equal to the interest on a current basis under the Prepetition Credit Documents on account of the Prepetition Revolving Loans until such time as the Prepetition Revolving Loans are indefeasibly paid in full, in cash; provided that, subject to the Final Order, interest will be payable retroactive to the Petition Date at the applicable rate on the Prepetition Revolving Loans. A copy of the order is available at https://urlcurt.com/u?l=gMXUHg from PacerMonitor.com. About Benefytt Technologies, Inc. Benefytt Technologies, Inc. and affiliates are a technology-driven distributor of insurance products covering Medicare-related insurance plans as well as other types of health insurance and supplemental products that operate in 44 states including Texas, New York, California, and Florida. The Debtors sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 23-90566) on May 23, 2023. In the petition signed by Michael DeVries, chief financial officer, the Debtor disclosed up to $10 billion in assets and up to $1 billion in liabilities. Judge Christopher M. Lopez oversees the case. The Debtors tapped KIRKLAND & ELLIS LLP and KIRKLAND & ELLIS INTERNATIONAL LLP as general bankruptcy counsel, JACKSON WALKER LLP as local bankruptcy counsel, ANKURA CONSULTING, LLC as restructuring advisor, JEFFERIES GROUP LLC as financial advisor, and STRETTO, INC. as claims and noticing agent. Wilmington Savings Fund Society, FSB, as DIP Lender, is represented by: Paul M. Basta, Esq. Joseph M. Graham, Esq. Leslie E. Liberman, Esq. Lucian Wang, Esq. Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas New York, NY 10019-6064 Email: pbasta@paulweiss.com jgraham@paulweiss.com lliberman@paulweiss.com lwang@paulweiss.com BIRCHINGTON LLC: Reaches Deal to Exit Chapter 11 Bankruptcy ----------------------------------------------------------- Daniel J. Sernovitz of Washington Business Journal reports that the owner of D.C. Holiday Inn Express strikes deal to exit bankruptcy protection. The owner of a Holiday Inn Express that opened by Mount Vernon Triangle in December 2022 is seeking to exit Chapter 11, three months after seeking bankruptcy protection in the U.S. Bankruptcy Court in D.C. Birchington LLC filed a motion May 8 to dismiss its Chapter 11 case, according to the motion. Underlying that, the LLC said it has reached a deal to restructure the $59.2 million loan it borrowed in 2019 from SSCHOF II Washington DC LLC to develop the 247-room hotel by Fourth and K streets NW, according to the motion. An affiliate of D.C. developer Habte Sequar, who has guaranteed the debt, Birchington owed nearly $74.3 million in principal, interest, fees and penalties as of Feb. 23, 2023. The developer has agreed to a series of conditions as part of the settlement, including monetary payments, that would extend the loan as far out as March 31, 2024, giving it time to catch up with its unpaid debt, according to court records. "Mr. Sequar understands and has weighed the risks and rewards of the proposed settlement as set forth in the Agreement," John D. Burns, an attorney with Greenbelt-based The Burns Law Firm LLC representing Birchington, said in a settlement motion filed with the court about a week prior to the motion to dismiss. "It is, therefore, in the best interests of the Debtor's estate and its creditors that this agreement be approved." Representatives for Birchington and SSCHOF, an affiliate of Atlanta-based Stonehill Strategic Capital, could not be reached for comment. Birchington's bankruptcy case was filed amid the larger upheaval created by fallout from the coronavirus outbreak. While public health restrictions meant to slow the pandemic's spread are being pulled back, D.C.'s hospitality industry has not yet fully rebounded to pre-pandemic conditions. That's especially true when it comes to international and group gravel, big movers for the industry. Other areas including leisure and domestic travel to D.C. have recovered faster. Amid that backdrop, Birchington allegedly defaulted on its loan in May 2022, months ahead of the loan’s slated maturity that September. It filed for Chapter 11 earlier this year, on Feb. 20, listing between $100,000 and $500,000 in assets, and between $50 million and $100 million in liabilities. The loan with SSCHOF was the biggest of its creditors. SSCHOF sued the loan's guarantors Feb. 23 in Fulton County, Georgia, superior court, for damages tied to the loan default. Per the settlement motion, SSCHOF would refrain from enforcing its rights under the loan default provided Birchington makes monthly payments of $500,000 starting in mid-June and directs all excess cash flow from the property to the lender, among other things. About Birchington LLC Birchington, LLC, operates a hotel in Washington, D.C. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.D.C. Case No. 23-00057) on Feb. 20, 2023, with $100,001 to $500,000 in assets and $50 million to $100 million in liabilities. Habte Sequar, manager, signed the petition. Judge Elizabeth L. Gunn oversees the case. The Debtor tapped John D. Burns, Esq., at the Burns Law Firm, Inc., as legal counsel and The 10Ninety Group, LLC as bookkeeper and general business manager. BISHOP OF OAKLAND: U.S. Trustee Appoints Creditors' Committee ------------------------------------------------------------- The U.S. Trustee for Region 17 appointed an official committee to represent unsecured creditors in the Chapter 11 case of The Roman Catholic Bishop of Oakland. The committee members are: 1. John-Norman Kalama Houo Ka Ikaika Cobb 2. Scott Brian Drescher 3. Jason Jaye 4. Jenna McCarthy 5. Kelly O’Lague 6. David Sheltraw 7. Judy Roberts 8. Sherry Waterworth 9. Steven Woodall Official creditors' committees serve as fiduciaries to the general population of creditors they represent. They may investigate the debtor's business and financial affairs. Committees have the right to employ legal counsel, accountants and financial advisors at a debtor's expense. About The Roman Catholic Bishop of Oakland The Roman Catholic Bishop of Oakland, a tax-exempt religious organization, sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Cal. Case No. 23-40523) on May 8, 2023. In the petition signed by Bishop Michael Charles Barber, the Debtor disclosed $100 million to $500 million in both assets and liabilities. Judge William J. Lafferty oversees the case. The Debtor tapped Foley & Lardner LLP as legal counsel and Alvarez & Marsal North America, LLC as financial advisor. Kurtzman Carson Consultants LLC is the Debtors' claims and noticing agent. BYJU'S ALPHA: Accused by Lenders of Hiding $500 Million ------------------------------------------------------- Steven Church and Jef Feeley of Bloomberg News report that lenders accused one of India's hottest tech companies, Byju's Alpha, of hiding $500 million as part of a fight between creditors and the self-proclaimed biggest education technology company in the world. The allegation came out at a court hearing on Thursday, May 18, 2023, in Delaware, where Byju's Alpha faces a lawsuit over who should control the company. Lenders claim that because of a default earlier this 2023, they have the right to put their representative, Timothy R. Pohl, in charge. The dispute is the latest setback for the high-flying startup founded by Byju Raveendran. About Byju Alpha Bengaluru, India-based Byju's provides online educational services and study materials for state boards and government exams. CANOVA ELECTRICAL: Case Summary & 19 Unsecured Creditors -------------------------------------------------------- Debtor: Canova Electrical Contracting, Inc. 535 5th Avenue East Mc Keesport, PA 15035 Chapter 11 Petition Date: May 26, 2023 Court: United States Bankruptcy Court Western District of Pennsylvania Case No.: 23-21149 Debtor's Counsel: Christopher M. Frye, Esq. STEIDL & STEINBERG, P.C. 707 Grant Street Suite 2830 Pittsburgh, PA 15219-1908 Tel: 412-391-8000 Fax: 412-391-0221 Email: chris.frye@steidl-steinberg.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $500,000 to $1 million The petition was signed by James J. Canova as president. A full-text copy of the petition containing, among other items, a list of the Debtor's 19 unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/QOO6ZRA/Canova_Electrical_Contracting__pawbke-23-21149__0001.0.pdf?mcid=tGE4TAMA CARETRUST REIT: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable ---------------------------------------------------------------- Fitch Ratings has affirmed the Long-Term Issuer Default Ratings (IDR) of CareTrust REIT, Inc. (NYSE: CTRE) and its operating subsidiary CTR Partnership L.P., including the unsecured debt ratings at 'BB+'/'RR4'. The Rating Outlook is Stable. The affirmation and Stable Outlook reflect Fitch's view that CTRE's long-term credit profile remains unchanged despite the effects of the coronavirus pandemic on skilled nursing facilities (SNFs) and senior housing (SH), and that there is significant headroom in key metrics to withstand rental non-payments and lease amendments in the interim. Fitch has also listed the rated senior unsecured notes at the co-borrower, CareTrust Capital Corp., and assigned the same 'BB+'/'RR4' rating to them. KEY RATING DRIVERS Meaningful Leverage Headroom & Financial Flexibility: CTRE maintains significant headroom for leverage to sustain below 5.0x, the level which Fitch views as more consistent with a lower IDR. CTRE's financial policy is leverage sustaining between 4.0x and 5.0x and it has been at or below this range in most periods. The issuer has ample headroom to both weather potential tenant credit issues and fund acquisitions. CTRE's credit profile further benefits from the limited near-term maturities (as described in the Liquidity section) and fully unencumbered portfolio. Tenant Concentration Balanced by Healthy Portfolio Lease Coverage: CTRE's top five tenants represent 70% of annualized base rent (ABR) as of Mar. 31, 2023, which is a significant concentration for a healthcare REIT. Tenant concentration is balanced by a healthy portfolio-level lease coverage (EBITDAR coverage at 2x for the TTM ended Dec. 31, 2022). CTRE's outsized exposure to The Ensign Group, Inc. (Ensign; 36% of ABR at 1Q23) enhances the above-average portfolio level coverage ratio given its 3.3x EBITDAR coverage of for the TTM ended Dec. 31, 2022. Mixed Operator Performance in Non-Ensign Properties: Fitch views the issuer's underwriting track record to be mixed due to sustained operator performance in some non-Ensign properties. Fitch estimates that EBITDAR coverage of non-Ensign properties for the TTM ended Dec. 31, 2022 excluding HHS funds was around 1.3x. The company's 6th, 7th and 10th largest tenants each had EBITDAR of CASH DEVELOPMENT: Ongoing Operations, Georgia Ops Sale to Fund Plan ------------------------------------------------------------------- An Amended Disclosure Statement was submitted by (i) Renewable Energy Holdings of Georgia, LLC, (ii) Cash Environmental Resources, LLC, (iii) Cash Development, LLC, (iv) Cash Environmental Holdings, LLC, (v) Coastal Landfill Disposal of Florida, LLC, and (vi) Green Energy Transport, LLC to provide information to parties in interest about the Chapter 11 Plans filed by each Debtor. The Plan contemplates the reorganization and ongoing business operations of Debtors and the resolution of the outstanding Claims against and interests in Debtors pursuant to Sections 1129(b) and 1123 of the Bankruptcy Code. Debtors REHG, GET, CER, CEH and CD (the "Georgia Affiliates"), entered into an asset purchase agreement with Matter Management Enterprises, LLC whereby the Georgia Affiliates are selling the Georgia operations for the amount of $5,500,000 (the "Georgia Sale"). The source of funds for the Plan will be (i) the proceeds of the Georgia Sale, (ii) the liquidation of the Debtor REHG's remaining assets, and (iii) the ongoing operations or CLDF, CD, and GET. Unsecured claims will be treated as follows: * Class 4: General Unsecured Claims against Renewable Energy Holdings of Georgia, Inc. Class 4 shall consist of the Allowed General Unsecured Claims. There shall be no distribution to unsecured creditors and are, therefore, conclusively presumed to have rejected this Plan pursuant to Bankruptcy Code 1126(g). * Class 5: General Unsecured Claims against Cash Environmental Resources, LLC. Class 5 shall consist of the general unsecured claims totaling $223,355. The Debtor shall pay the General Unsecured Creditors in full plus interest accruing at the annual rate of 4.25% from the Effective Date until the date of payment. Beginning on the later of (a) December 31, 2024, and (b) the first day of the month following the date on which Comerica's Class 4 Claim is indefeasibly paid in full, and continuing for the 12 quarters following such date, the Debtor shall pay the General Unsecured Creditors equal quarterly pro-rata payments in the total amount of $18,612.83. With the final payment, the Debtor shall make a final distribution to Class 5 Creditors of any outstanding principal and interest due. Class 5 is impaired. * Class 6: Unsecured Convenience Class against Cash Environmental Resources. Class 6 consists of unsecured claims each less than or equal to $10,000 and totaling $17,455. Holders of Allowed Class 6 Claims shall be paid on the later of (a) the second anniversary of the Effective Date and (b) the first day of the month following the date on which Comerica's Class 4 Claim is indefeasibly paid in full. On that date, Allowed Class 6 Claims shall be paid in full plus interest accruing at the annual rate of 4.25% from the Effective Date until the date of such payment. Class 6 is impaired. * Class 3: General Unsecured Claims against Cash Development, LLC. Class 3 shall consist of the general unsecured claims totaling $334,490. The Debtor shall pay the General Unsecured Creditors in full plus interest accruing at the annual rate of 4.25% from the Effective Date until the date of payment. Beginning on the later of (a) December 31, 2024, and (b) the first day of the month following the date on which Comerica's Class 1 Claim is indefeasibly paid in full, and continuing for the 12 quarters following such date, the Debtor shall pay the General Unsecured Creditors equal quarterly pro-rata payments in the total amount of $27,874.14. With the final payment, the Debtor shall make a final Distribution to Class 3 Creditors of any outstanding principal and interest due. Class 3 is impaired. * Class 4: Unsecured Convenience Class against Cas Development. Class 4 shall consist of unsecured claims less than or equal to $5,000 totaling $28,810. Holders of Allowed Class 4 Claims shall be paid on the later of (a) the second anniversary of the Effective Date and (b) the first day of the month following the date on which Comerica's Class 1 Claim is indefeasibly paid in full. On that date, Allowed Class 4 Claims shall be paid in full plus interest accruing at the annual rate of 4.25% from the Effective Date until the date of such payment. Class 4 is impaired. * Class 5: General Unsecured Claims against Cash Environmental Holdings, LLC. Class 5 shall consist of the general unsecured claims totaling $18,500. On the later of (a) the second anniversary of the Effective Date and (b) the first day of the month following the date on which Comerica's Class 4 Claim is indefeasibly paid in full, Debtor shall pay the General Unsecured Creditors in full plus interest accruing at the annual rate of 4.25% from the Effective Date until the date of such payment. Class 5 is impaired. * Class 5: General Unsecured Claims against Coastal Landfill Disposal of Florida, LLC. Class 5 shall consist of the general unsecured claims totaling $393,425. The Debtor shall pay the General Unsecured Creditors in full plus interest accruing at the annual rate of 4.25% from the Effective Date until the date of payment. Beginning on the later of (a) Dec. 31, 2024, and (b) the first day of the month following the date on which Comerica's Class 4 Claim is indefeasibly paid in full, and continuing for the 12 quarters following such date, the Debtor shall pay the General Unsecured Creditors equal quarterly pro-rata payments in the total amount of $32,785.40. With the final payment, the Debtor shall make a final Distribution to Class 5 Creditors of any outstanding principal and interest due. Class 5 is impaired. * Class 6: Unsecured Convenience Class against Coastal Landfill Disposal of Florida. Class 6 shall consist of unsecured claims each less than or equal to $10,000 and estimated to total $60,497. Holders of Allowed Class 6 Claims shall be paid on the later of (a) the second anniversary of the Effective Date and (b) the first day of the month following the date on which Comerica's Class 4 Claim is indefeasibly paid in full. On that date, Allowed Class 6 Claims shall be paid in full plus interest accruing at the annual rate of 4.25% from the Effective Date until the date of such payment. Class 6 is impaired. * Class 4: General Unsecured Claims against Green Energy Transport, LLC. Class 4 shall consist of the general unsecured claims totaling $1,296,770. The Debtor shall pay the General Unsecured Creditors in full plus interest accruing at the annual rate of 4.25% from the Effective Date until the date of payment. Beginning on the later of (a) December 31, 2024, and (b) the first day of the month following the date on which Comerica's Class 3 Claim is indefeasibly paid in full, and continuing for the 16 quarters following such date, the Debtor shall pay the General Unsecured Creditors equal quarterly pro-rata payments in the total amount of $51,798.09. With the final payment, the Debtor shall make a final Distribution to Class 4 Creditors of any outstanding principal and interest due. Class 4 is impaired. * Class 5: Unsecured Convenience Class against Green Energy Transport. Class 5 shall consist of unsecured claims each less than or equal to $10,000 and estimated to total $70,755. Holders of Allowed Class 5 Claims shall be paid on the later of (a) the second anniversary of the Effective Date and (b) the first day of the month following the date on which Comerica's Class 3 Claim is indefeasibly paid in full. On that date, Allowed Class 5 Claims shall be paid in full plus interest accruing at the annual rate of 4.25% from the Effective Date until the date of such payment. Class 5 is impaired. Attorneys for the Debtors: Cameron M. McCord, Esq. JONES & WALDEN, LLC 699 Piedmont Avenue, NE Atlanta, GA 30308 Tel: (404) 564-9300 A copy of the Disclosure Statement dated May 19, 2023, is available at from http://bit.ly/3om6sqqPacerMonitor.com. About Cash Development Cash Development, LLC specializes in hauling, disposal, and recycling of construction demolition waste with its headquarters located at 2859 Paces Ferry Road, Suite 1150, Atlanta, Ga. Cash Development sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 22-41007) on Aug. 26, 2022. In the petition filed by its authorized representative, Carson Cash King, the Debtor disclosed up to $50,000 in assets and up to $500,000 in liabilities. Judge Barbara Ellis-Monro oversees the case. Cameron M. McCord, Esq., at Jones & Walden, LLC and Baker Donelson Bearman Caldwell & Berkowitz, PC serve as the Debtor's bankruptcy counsel and special counsel, respectively. Windham Brannon, LLC is the Debtor's accountant. CATALENT INC: S&P Downgrades ICR to 'BB-', Outlook Negative ----------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on New Jersey-based contract development and manufacturing organization Catalent Inc. to 'BB-' from 'BB', its issue-level rating on its senior secured debt to 'BB+' from 'BBB-', and its rating on its senior unsecured debt to 'B+' from 'BB-'. S&P's '1' recovery rating on the senior secured debt and '5' recovery rating on the senior unsecured debt are unchanged. S&P removed the ratings from CreditWatch, where it placed them May 9, 2023, with negative implications. S&P's negative outlook on the Catalent rating reflects low visibility and risk to its base case that S&P Global Ratings-adjusted leverage will improve to about 5x in 12-18 months. S&P said, "The downgrade reflects our expectation that leverage will be elevated primarily due to operating and productivity issues and the reduction of COVID-19-related revenue. Catalent disclosed that its forecasting assumptions were inaccurate and did not adequately integrate the impact of the significant contraction in biotech funding that affected newer modalities and the pace of a COVID-19-related sales decrease. In addition, significantly increased costs and its high-fixed-cost base will substantially reduce in EBITDA for 2023. While Catalent released its updated guidance for the second half, we forecast S&P Global Ratings-adjusted leverage to peak above 6x in the next 12 months but improve to about 5x by the end of fiscal 2024." Usually a relatively predictable business, the high-fixed-cost base and strict regulatory standards can sharply reduce revenue and EBITDA. Long-term contracts, a diverse customer base and product portfolio, and regulation that creates high barriers to entry and switching costs all usually give Catalent a relatively predictable revenue stream. Catalent's manufacturing facilities are subject to strict regulatory standards, which S&P views as both a risk for Catalent and a barrier to entry for competitors. Customers and regulatory agencies regularly inspect the company's facilities, and any findings of improper controls and procedures could result in operating delays and lower-than-expected revenue. Catalent has implemented corrective and preventative actions following regulatory inspections this year, and we do not anticipate any loss of customer or product because of the shipment delays or U.S. Food and Drug Administration (FDA) inspections. Despite the recent facility issues, manufacturers are part of product approval from the FDA and other regulatory agencies. They require reopening the approval to change manufacturers, which drug companies are hesitant to do. Productivity challenges and higher expected costs at drug manufacturing facilities in Bloomington, Ind., and Brussels emerged in the second half of 2023. Catalent expects a material decline in its biologics business from delayed shipments, COVID-19-related revenue, and biotech funding that affects new modalities. This is likely to lead to low-double-digit percent decline in revenue in 2023. Due to the high-fixed-cost base, the reduction in revenue and addition costs, including the corrective and preventive actions taken at its facilities and the implementation of enterprise resource planning system, S&P expects EBITDA margins to be affected 600-800 basis points. S&P said, "After a low-double-digit percent decline in revenue in 2023, we anticipate Catalent will return to mid-single-digit growth in 2024.Although visibility is low, we believe growth will come from its gene therapy business, technology transfers to be completed later in fiscal 2023, and completion of its new enterprise resource planning system to help additional productivity. This will be partially offset by a significant decline from COVID-19-related revenue, expected to be $600 million in fiscal 2023, but lead to mid-single-digit percent growth in its biologics segment in 2024. Catalent's pharmaceutical and consumer health segment was flat in the first half of fiscal 2023 compared to the first half of 2022, but we believe it will return to growth in 2024. We believe supply chain challenges and delayed launches contributed to the slow growth, which we do not expect will persist. Although we expect lower consumer demand, some problems will be resolved and lead to low-single-digit percent growth in the segment in 2024. Given our expectation of mid-single-digit percent growth in the biologics business and low-single-digit growth in the pharma and consumer health segment, we expect Catalent's revenue will return to mid-single-digit growth in 2024." Management actions in fiscal 2023 should benefit fiscal 2024 EBITDA margins. Costs in its facilities to address issues related to prior FDA inspections were higher than expected. In addition, we expect certain one-time inventory reserve adjustments to affect 2023 margins. The company has committed to doubling its previous $75 million-$85 million in savings from restructuring. S&P said, "We expect nearly all of these in the second half of 2024. Furthermore, Catalent has capacity and can achieve modest operating leverage as we expect revenue to increase in 2024 compared to 2023. All considered, we expect EBITDA margins to improve to about 20%-22% in 2024 from 17%-19% in 2023." S&P said, "Our negative outlook reflects limited visibility and risks to our base-case expectations. We believe Catalent's revenue and EBITDA will begin to improve in fiscal 2024 and that leverage will trend toward 5x by the end of the year. We expect improved operations, reduced working capital usage, and lower capital spending will also lead to positive free operating cash flow (FOCF) in fiscal 2024. "We could lower our rating on Catalent if we anticipate that S&P Global Ratings-adjusted leverage will remain 5x for longer than 12-18 months." S&P could revise its outlook to stable if: -- S&P Global Ratings-adjusted leverage declines below 5x and we expect it to remain there long term, including acquisitions and share repurchases; and -- The business begins to stabilize, the company addresses operational challenges, and visibility improves, providing better confidence in its guidance. ESG credit indicators: E-2; S-2; G-3 Governance factors are a moderately consideration in S&P's credit analysis because of Catalent's inability to file its third-quarter financials in a timely manner and intention to restate its fiscal 2022 audit. CBAK ENERGY: Posts $2.2 Million Net Loss in First Quarter --------------------------------------------------------- CBAK Energy Technology, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $2.20 million on $42.40 million of net revenues for the three months ended March 31, 2023, compared to net income of $680,503 on $80.20 million of net revenues for the three months ended March 31, 2022. As of March 31, 2023, the Company had $252.17 million in total assets, $129.24 million in total liabilities, and $122.93 million in total equity. CBAK Energy said, "The Company has accumulated deficit from recurring net losses and significant short-term debt obligations maturing in less than one year as of March 31, 2023. These conditions raise substantial doubt about the Company ability to continue as a going concern. The Company's plan for continuing as a going concern included improving its profitability, and obtaining additional debt financing, loans from existing directors and shareholders for additional funding to meet its operating needs. There can be no assurance that the Company will be successful in the plans described above or in attracting equity or alternative financing on acceptable terms, or if at all." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1117171/000121390023039358/f10q0323_cbakenergy.htm About CBAK Energy Liaoning Province, People's Republic of China-based CBAK Energy -- www.cbak.com.cn -- is a manufacturer of new energy high power lithium batteries that are mainly used in light electric vehicles, electric vehicles, electric tools, energy storage including but not limited to uninterruptible power supply (UPS) application, and other high-power applications. Its primary product offering consists of new energy high power lithium batteries, but it is also seeking to expand into the production and sale of light electric vehicles. CBAK Energy reported a net loss of $11.33 million for the year ended Dec. 31, 2022, compared to net income of $61.56 million for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $244.03 million in total assets, $119.65 million in total liabilities, and $124.38 million in total equity. Hong Kong, China-based Centurion ZD CPA & Co., the Company's auditor since 2016, issued a "going concern" qualification in its report dated April 14, 2023, citing that the Company has accumulated deficit from recurring net losses and significant short-term debt obligations maturing in less than one year as of Dec. 31, 2022. All these factors raise substantial doubt about its ability to continue as a going concern. CELSIUS NETWORK: Fahrenheit Consortium Wins Auction for Assets -------------------------------------------------------------- Investopedia reports that crypto consortium Fahrenheit, which includes Arrington Capital and US Bitcoin Corp., won the bid to purchase the assets of insolvent crypto lender Celsius, court filings showed Thursday. Celsius filed for Chapter 11 bankruptcy in July last year after not being able to keep up with customer's redemption requests, and as a part of the bankruptcy process sought a buyer via auction to revive its crypto lending and mining businesses in April 2023. The Fahrenheit consortium won the three-way auction, which also saw bids from Blockchain Recovery Investment Committee and crypto asset manager NovaWulf. Fahrenheit, led by Arrington Capital and US Bitcoin Corp, will take control of Celsius's institutional loan portfolio, staked cryptocurrencies, mining unit, and alternative investments. The deal requires Fahrenheit to pay a $10 million deposit within three days to secure the agreement. While the bid has been accepted by Celsius and its creditors, regulatory approval by the U.S. Bankruptcy Court for the Southern District of New York is still pending. If for some reason, Fahrenheit's deal falls through, Blockchain Recovery Investment Committee, backed by Gemini Trust, VanEck, and others, will act as a backup. Former Celsius Customers This plan, if accepted by the court, provides a path toward disbursing some of the platform's liquid cryptocurrency to Celsius users. The Fahrenheit consortium will also provide the necessary capital, management team, and technology to establish a new company called NewCo., which will be owned by Celsius's creditors. Under this plan, Celsius account holders effectively own almost 100% of NewCo's equity, except for the portion that goes toward Fahrenheit's management fees. About Celsius Network Celsius Network LLC -- http://www.celsius.network/-- is a financial services company that generates revenue through cryptocurrency trading, lending, and borrowing, as well as by engaging in proprietary trading. Celsius helps over a million customers worldwide to find the path towards financial independence through a compounding yield service and instant low-cost loans accessible via a web and mobile app. Celsius has a blockchain-based fee-free platform where membership provides access to curated financial services that are not available through traditional financial institutions. The Celsius Wallet claims to be one of the only online crypto wallets designed to allow members to use coins as collateral to get a loan in dollars, and in the future, to lend their crypto to earn interest on deposited coins (when they're lent out). Crypto lenders such as Celsius boomed during the COVID-19 pandemic, drawing depositors with high interest rates and easy access to loans rarely offered by traditional banks. But the lenders' business model came under scrutiny after a sharp sell-off in the crypto market spurred by the collapse of major tokens terraUSD and luna in May 2022. New Jersey-based Celsius froze withdrawals in June 2022, citing "extreme" market conditions, cutting off access to savings for individual investors and sending tremors through the crypto market. The list of major crypto firms that have filed for bankruptcy protection in 2022 now includes Celsius Network, Three Arrows Capital and Voyager Digital. Celsius Network, LLC and its subsidiaries sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 22-10964) on July 14, 2022. In the petition filed by CEO Alex Mashinsky, the Debtors estimated assets and liabilities between $1 billion and $10 billion. The Debtors tapped Kirkland & Ellis, LLP and Kirkland & Ellis International, LLP as bankrupty counsels; Fischer (FBC & Co.) as special counsel; Centerview Partners, LLC as investment banker; and Alvarez & Marsal North America, LLC as financial advisor. Stretto is the claims agent and administrative advisor. On July 27, 2022, the U.S. Trustee appointed an official committee of unsecured creditors. The committee tapped White & Case, LLP as its bankruptcy counsel; Elementus Inc. as its blockchain forensics advisor; M3 Advisory Partners, LP as its financial advisor; and Perella Weinberg Partners, LP as its investment banker. Shoba Pillay, Esq., is the examiner appointed in the Debtors' Chapter 11 cases. Jenner & Block, LLP and Huron Consulting Services, LLC serve as the examiner's legal counsel and financial advisor, respectively. CES ENERGY: DBRS Confirms B(high) Issuer Rating, Trend Stable ------------------------------------------------------------- DBRS Limited confirmed CES Energy Solutions Corp.'s (CES or the Company) Issuer Rating and Senior Unsecured Notes (the Senior Notes) rating at B (high) with Stable trends. The recovery rating on the Senior Notes remains unchanged at RR4. The rating confirmations and the Stable trends are underpinned by CES' leading market position in Canada, its growing market position in the U.S., and DBRS Morningstar's expectation that the key credit metrics will remain supportive of the rating. CES' earnings and operating cash flow (OCF) in 2022 were materially higher, driven by an increase in industry activity levels and market share gained since the downturn in 2020. While the Company was able to realize product price increases, profit margins in 2022 were relatively flat because of inflationary pressure on product and labor costs. The Company generated a material free cash flow (FCF; OCF after capital expenditures and dividends) surplus in 2022. However, higher activity levels led to a significant working capital surplus, which the Company funded through draws on its revolving credit facilities. As a result, the Company's overall debt levels were materially higher at YE2022 compared with YE2021. Nevertheless, higher earnings and cash flow offset the impact of higher debt, and the Company's key credit metrics improved in 2022. DBRS Morningstar notes that the Company has an established track record of monetizing its working capital during periods of lower activity levels with relatively insignificant bad debt expense. DBRS Morningstar's crude oil and natural gas price assumptions for 2023 are conservative. Consequently, DBRS Morningstar expects industry activity levels to moderate in 2023. Inflationary pressure on costs is expected to continue to persist in parts of the business; however, the impact should be less pronounced than the last two years. While earnings and OCF are expected to decline modestly, DBRS Morningstar expects the Company to generate a meaningful FCF surplus in 2023. DBRS Morningstar expects the Company to direct the FCF surplus along with an expected working capital inflow primarily toward reducing debt. DBRS Morningstar expects the Company to maintain its lease-adjusted debt-to-cash flow ratio at or around 3.0 times (x) to 3.5x. CES has increased the size and extended the maturity date of its credit facilities, which should provide CES with adequate liquidity to meet higher demand if commodity prices stay elevated for longer and repay the Senior Notes if required. DBRS Morningstar expects the Company to comply with applicable financial covenants. DBRS Morningstar may consider a positive rating action if CES maintains its market position and reduces debt meaningfully, bolstering DBRS Morningstar's confidence that the Company will maintain its lease-adjusted debt-to-cash flow ratio at or around 2.5x through commodity price cycles. Although unlikely, DBRS Morningstar may consider a negative rating action if activity levels and key credit metrics are materially and consistently below DBRS Morningstar's expectations. Notes: All figures are in Canadian dollars unless otherwise noted. CHASE HOME 2023-RPL1: DBRS Finalizes BB Rating on Class B-2 Certs ----------------------------------------------------------------- DBRS, Inc. finalized its provisional ratings on the Mortgage Certificates, Series 2023-RPL1 (the Certificates) issued by Chase Home Lending Mortgage Trust 2023-RPL1 (CHASE 2023-RPL1 or the Trust): -- $400.1 million Class A-1-A at AAA (sf) -- $20.5 million Class A-1-B at AAA (sf) -- $420.6 million Class A-1 at AAA (sf) -- $24.3 million Class A-2 at AA (high) (sf) -- $15.5 million Class M-1 at A (high) (sf) -- $11.0 million Class M-2 at BBB (high) (sf) -- $7.8 million Class B-1 at BBB (low) (sf) -- $5.0 million Class B-2 at BB (sf) The AAA (sf) rating on the Class A-1-A, Class A-1-B, and Class A-1 Certificates reflects 15.90% of credit enhancement, provided by subordinated notes in the transaction. The AA (high) (sf), A (high) (sf), BBB (high) (sf), BBB (low) (sf), and BB (sf) ratings reflect 11.05%, 7.95%, 5.75%, 4.20%, and 3.20% of credit enhancement, respectively. Other than the classes specified above, DBRS Morningstar does not rate any other classes in this transaction. This transaction is a securitization of a portfolio of primarily seasoned performing and reperforming first-lien residential mortgages and funded by the issuance of mortgage certificates (the Certificates). The Certificates are backed by 2,565 loans with a total principal balance of $526,395,515 as of the Cut-Off Date (March 31, 2023). J.P. Morgan Mortgage Acquisition Corp. will serve as the Sponsor and Mortgage Loan Seller of the transaction. JPMorgan Chase Bank, National Association (JPMCB) will act as the Representing Party, Servicer, and Custodian. DBRS Morningstar's ratings on JPMCB's Long-Term Issuer Rating and Long-Term Senior Debt are AA with Stable trends, and the Short-Term Instruments rating is R-1 (high) with a Stable trend. The loans are approximately 202 months seasoned on average. As of the Cut-Off Date, 99.5% of the pool is current under the Mortgage Bankers Association (MBA) delinquency method, and 0.5% is in bankruptcy. All the bankruptcy loans are currently performing. Approximately 97.6% and 91.4% of the mortgage loans have been zero times (x) 30 days delinquent for the past 12 months and 24 months, respectively, under the MBA delinquency method. Within the portfolio, 98.4% of the loans are modified. The modifications happened more than two years ago for 99.1% of the modified loans. Within the pool, 949 mortgages have non-interest-bearing deferred amounts, which equates to 9.4% of the total principal balance. Unless specified otherwise, all statistics on the mortgage loans in the related report are based on the current balance, including the applicable non-interest-bearing deferred amounts. One of the Sponsor's majority-owned affiliates will acquire and retain a 5% vertical interest in the transaction, consisting of an uncertificated interest in the issuing entity, to satisfy the credit risk retention requirements. Such uncertificated interest represents the right to receive at least 5% of the amounts collected on the mortgage loans (net of fees, expenses, and reimbursements). There will not be any advancing of delinquent principal or interest on any mortgage by the Servicer or any other party to the transaction; however, the Servicer is generally obligated to make advances in respect of taxes, and insurance as well as reasonable costs and expenses incurred in the course of servicing and disposing of properties. For this transaction, the servicing fee payable for the mortgage loans is composed of three separate components: the base servicing fee, the delinquent servicing fee, and the additional servicing fee. These fees vary based on the delinquency status of the related loan and will be paid from interest collections before distribution to the securities. On any Distribution Date when the aggregate unpaid principal balance (UPB) of the mortgage loans is less than 10% of the aggregate Cut-Off Date UPB, the Servicer (and it's successors and assigns) will have the option to purchase all of the mortgage loans at a purchase price equal to the sum of the UPB of the mortgage loans, accrued interest, the appraised value of the real estate owned (REO) properties, and any unpaid expenses and reimbursement amounts. The transaction employs a sequential-pay cash flow structure. Principal proceeds can be used to cover interest shortfalls on the Certificates, but such shortfalls on Class M-1 and more subordinate bonds will not be paid from principal proceeds until Class A-1-A, A-1-B, and A-2 are retired. Notes: All figures are in U.S. dollars unless otherwise noted. CHENG & COMPANY: Banned from Using Cash Collateral -------------------------------------------------- The U.S. Bankruptcy Court for the District of Columbia entered an order prohibiting Cheng & Company, L.L.C. from using cash collateral in accordance with its agreement with United Bank. The Bank asserts that it holds a security interest in the Property and all rents, revenues, income, profits, and other benefits arising from the use and enjoyment of all or any portion of the Property. The Debtor is prohibited from using the cash collateral of United Bank, specifically, rents and proceeds from the property at 619 H Street, NW Washington, D.C. 20001 until United Bank consents or the Court authorizes such use. A copy of the order is available at https://urlcurt.com/u?l=vHOZRa from PacerMonitor.com. About Cheng & Company Washington, D.C.-based Cheng & Company, LLC is primarily engaged in acting as lessors of buildings used as residences or dwellings. Cheng & Company sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.D.C. Case No. 23-00104) on April 17, 2023. In the petition signed by Anthony C. Cheng, managing member, the Debtor disclosed $6,202,284 in total assets and $7,954,326 in total liabilities. Judge Elizabeth L. Gunn oversees the case. Ronald J. Drescher, Esq., at Drescher & Associates, PA is the Debtor's counsel. CHENIERE ENERGY: Egan-Jones Retains CCC+ Senior Unsecured Ratings ----------------------------------------------------------------- Egan-Jones Ratings Company on May 8, 2023, maintained its 'CCC+' foreign currency and local currency senior unsecured ratings on debt issued by Cheniere Energy, Inc. EJR also withdrew its 'B' rating on commercial paper issued by the Company. Headquartered in Houston, Texas, Cheniere Energy, Inc. is an energy company focused on LNG-related businesses. CHESTNUT RIDGE: Amends Plan to Include Unsecured Note Claims Pay ---------------------------------------------------------------- Chestnut Ridge Associates, LLC, submitted an Amended Disclosure Statement for the Amended Chapter 11 Plan of Reorganization dated May 21, 2023. The Debtor's principal asset is a shopping center known as The Shoppes at Kingsgate, located at 1113-1387 Kingwood Drive, Humble, Texas (the "Property"). The Debtor believes the Property's current value is no less than $26 million. In the Debtor's Chapter 11 Case, the Plan proposes that the Debtor will have a reasonable time to market the Property and conclude a sale thereof on the most advantageous terms possible. The Debtor believes that the net proceeds of such a sale will be sufficient to provide full payment Allowed Administrative Expenses of the Chapter 11 Case and all Allowed pre-petition Claims against the Debtor, whether secured or unsecured. Any net proceeds from such a sale that remain after full payment of such Claims will be distributed to equity holders in the Debtor on a pro rata basis. Class 5 consists of Member Unsecured Note Claims. Each holder of an Allowed Member Unsecured Note Claim shall receive, after Classes 1 to 4 have received the full treatment in accordance with the Plan, Cash equal to the Allowed amount of such Claim on or before the Post-Closing Date Distribution Date. Class 6 consists of General Unsecured Claims. This class includes all General Unsecured Claims other than the Member Unsecured Note Claims or the Painted Tree Claim. Each holder of an Allowed General Unsecured Claim shall receive, after Classes 1 to 4 have received the full treatment in accordance with the Plan, Cash equal to the Allowed amount of such Claim on or before the Post Closing Date Distribution Date. Class 7 consists of Painted Tree Claim. The Painted Tree Claim in the amount as set forth in the Plan as the Proposed Cure Claim for Painted Tree Kingwood, LLC (the "Painted Tree Cure Amount") shall be satisfied by: (i) monthly rent credited toward the Painted Tree Cure Amount until the amount is satisfied in full, and (ii) in the event a Closing takes place prior to the satisfaction in full of the Painted Tree Cure Amount as set forth in (i) all remaining balance of the Painted Tree Cure Amount shall be paid, after Classes 1 to 4 have received the full treatment in accordance with the Plan, on or before the Post Closing Date Distribution Date. Class 8 consists of Interests. Each holder of an Allowed Interest in the Debtor shall retain each of their Allowed Interest from and after the Effective Date. In the event of a sale of the Property, each holder of an Allowed Interest in the Debtor shall receive a Pro Rata Share of any Net Proceeds remaining after completion of the full treatment, in accordance with the Plan, of all Allowed Administrative Expenses, Allowed Priority Claims (Class 1), Allowed Secured Tax Claims (Class 2), the Allowed Kingsgate Secured Claim (Class 3), Allowed Other Secured Claims (Class 4), Allowed Member Unsecured Note Claims (Class 5), Allowed General Unsecured Claims (Class 6), and the Painted Tree Claim (Class 7). The Plan gives the Debtor a reasonable period of time, of approximately 18 months, to either (1) market and sell the Property for the highest obtainable price, or (2) obtain refinancing, that would provide full payment of Allowed Secured Claims and Allowed General Unsecured Claims, plus some return to Interest holders. The Financial Forecast shows the Debtor's ability to continue operations and meet its financial obligations until a sale or refinancing transaction is closed by December 31, 2024. A full-text copy of the Amended Disclosure Statement dated May 21, 2023 is available at https://urlcurt.com/u?l=6mtKiH from PacerMonitor.com at no charge. Attorneys for the Debtor: Jeff P. Prostok Emily S. Chou Dylan T.F. Ross FORSHEY & PROSTOK, LLP 777 Main Street, Suite 1550 Fort Worth, Texas 76102 Telephone: (817) 877-8855 Facsimile: (817) 877-4151 Email: jprostok@fosheyprostok.com echou@forsheyprostok.com dross@forsheyprostok.com About Chestnut Ridge Associates Chestnut Ridge Associates LLC is primarily engaged in renting and leasing real estate properties. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-90069) on Feb. 5, 2023. In the petition signed by Andrew Schreer, managing member, the Debtor disclosed up to $50 million in both assets and liabilities. Judge David R. Jones oversees the case. Jeff P. Prostok, Esq., at Forshey & Prostok, LLP, is the Debtor's legal counsel. CHIEF CORNERSTONE: Taps David J. Winterton & Assoc. as Counsel -------------------------------------------------------------- Chief Cornerstone Builders, LLC seeks approval from the U.S. Bankruptcy Court for the District of Nevada to employ David J. Winterton & Assoc., Ltd. to handle its Chapter 11 case. The firm will be paid at these rates: Attorneys $250 to $400 per hour Paralegal $150 per hour In addition, the firm will receive reimbursement for out-of-pocket expenses incurred. The retainer fee is $2,500. David Winterton Esq., a partner at David J. Winterton & Assoc., disclosed in a court filing that his firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached at: David J. Winterton Esq. David J. Winterton & Assoc., Ltd. 7881 W. Charleston Blvd., Suite 220 Las Vegas, NV 89117 Tel: (702) 363-0317 Fax: (702) 363-1630 Email: david@davidwinterton.com About Chief Cornerstone Builders Chief Cornerstone Builders, LLC, a Las Vegas-based company, filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. D. Nev. Case No. 23-11008) on March 16, 2023, with $1,079,800 in assets and $885,000 in liabilities. Edward Burr has been appointed as Subchapter V trustee. Judge Natalie M. Cox oversees the case. The Debtor is represented by David J. Winterton & Assoc., Ltd. CLEAN HARBORS: Egan-Jones Hikes Senior Unsecured Ratings to BB+ --------------------------------------------------------------- Egan-Jones Ratings Company on May 7, 2023, upgraded the foreign currency and local currency senior unsecured ratings on debt issued by Clean Harbors, Inc. to BB+ from BB. Headquartered in Norwell, Massachusetts, Clean Harbors, Inc. provides a variety of environmental remediation and industrial waste management services to customers in the United States and Puerto Rico. COAST CAPITAL: DBRS Assigns BB(high) NVCC Sub Debt Rating --------------------------------------------------------- DBRS Limited assigned a NVCC Subordinated Debt Rating of BB (high) with a Stable trend to Coast Capital Savings Federal Credit Union's (Coast Capital or the Credit Union) Subordinated Notes (the Notes). The $100 million Notes issuance has a maturity date of May 2, 2033, and will be direct unsecured subordinated indebtedness of the Credit Union ranking equally and rateably with all other subordinated indebtedness of Coast Capital. DBRS Morningstar assigned the NVCC Subordinated Debt a rating equal to that of the Coast Capital's Intrinsic Assessment of BBB (high) less three rating notches as the NVCC Subordinated Debt has only an Office of the Superintendent of Financial Institutions (OSFI)-compliant NVCC trigger, which is consistent with the OSFI requirements for NVCC instruments, and no additional triggers. The notching differentials are equivalent to those adopted for other OSFI-regulated Canadian banks. RATING DRIVERS The rating of the Notes will move in tandem with Coast Capital's Long-Term Issuer Rating. Over the longer term, ratings would be upgraded if the Credit Union is able to further strengthen its franchise through a sustained increase in member share of wallet and/or a sustained improvement in earnings, including a higher proportion of non-interest income. Alternatively, the ratings would be downgraded if there is a sustained deterioration in asset quality, especially from deficiencies in risk management. In addition, the ratings would be downgraded due to an inability to control costs or a sustained reduction in internal capital generation. Notes: All figures are in Canadian dollars unless otherwise noted. COMM 2015-LC21: DBRS Confirms CCC Rating on Class F Certs --------------------------------------------------------- DBRS Limited confirmed its ratings on the following classes of Commercial Pass-Through Certificates, Series 2015-LC21 issued by COMM 2015-LC21 Mortgage Trust: -- Class A-3 at AAA (sf) -- Class A-4 at AAA (sf) -- Class A-SB at AAA (sf) -- Class A-M at AAA (sf) -- Class X-A at AAA (sf) -- Class B at AA (low) (sf) -- Class X-B at A (sf) -- Class C at A (low) (sf) -- Class X-C at BBB (sf) -- Class D at BBB (low) (sf) -- Class X-D at B (high) (sf) -- Class E at B (sf) -- Class F at CCC (sf) All trends are Stable, with the exception of Class F, which has a rating that does not typically carry a trend in commercial mortgage-backed securities (CMBS) ratings. The rating confirmations reflect the overall stable performance of the transaction, which has remained in line with DBRS Morningstar's expectations since its last review. The CCC (sf) rating on Class F is reflective of DBRS Morningstar's continued loss expectations for several loans in special servicing, as discussed below. At issuance, the transaction consisted of 103 fixed-rate loans secured by 198 commercial and multifamily properties, with a trust balance of $1.3 billion. As of the April 2023 remittance, 89 loans remained within the transaction with a trust balance of $987.3 million, reflecting collateral reduction of 25.3% since issuance. There are currently 19 fully defeased loans, representing 17.8% of the current pool balance. The notable principal paydown and defeasance serves as a mitigant against the potential for further credit deterioration of the transaction's eight loans secured by office collateral, which represent 15.8% of the pool balance. In general, the performance of the office sector has deteriorated in recent months with elevated vacancy rates in many submarkets because of a shift in workplace dynamics. Six of the eight office loans, representing 12.0% of the pool, have either transferred to special servicing or are on the servicer's watchlist. In total, 20 loans, representing 31.5% of the pool, are being monitored on the servicer's watchlist and six loans, representing 8.6% of the current pool, are in special servicing. As part of this review, DBRS Morningstar increased the probability of default for all of the distressed loans to reflect their current risk profile and, in certain cases, applied stressed loan-to-value (LTV) ratios. In addition, DBRS Morningstar analyzed three of the six specially serviced loans with liquidation scenarios, resulting in implied loss severities ranging from 48% to 72%. All three loans analyzed with liquidation scenarios are currently being reported as real estate owned (REO) and have had recent appraisals valuing the collateral well below their respective loan amounts. The two largest office loans on the servicer's watchlist are the Meridian at Brentwood (Prospectus ID#3, 3.9% of the pool) and Santa Monica Clock Tower (Prospectus ID#8, 2.7% of the pool) loans, both of which are being monitored for declining cash flow and occupancy. The Meridian at Brentwood loan, secured by a mixed-use office/retail building in Brentwood, Missouri, had a cash trap initiated after its largest tenant, BJC Health System (58.7% of net rentable area (NRA)), failed to renew the lease for a portion of its space at the property, representing 12.4% of the NRA. The remainder of its space is scheduled to expire in December 2025, one month before the loan's January 2026 maturity date. The balance of the cash flow sweep was not provided; however, the loan reports approximately $930,000 in rollover reserve, which could be used to help retenant the vacated space. The Santa Monica Clock Tower loan, secured by an office property in Santa Monica, California, was added to the watchlist in February 2023 for a low debt service coverage ratio (DSCR) following the departure of several tenants in 2020 and 2021. Occupancy declined to 66.6% as of the September 2022 rent roll from 99.0% in 2019, and the DSCR was most recently reported at 1.27 times (x) for the trailing nine-month period ended September 30, 2022. DBRS Morningstar analyzed both loans with elevated probabilities of default and stressed LTVs, resulting in expected loss levels over 100.0% greater than the pool's weighted-average expected loss. The largest loan in special servicing, Delaware Corporate Center I & II (Prospectus ID#9, 2.4% of the pool), is secured by a 200,275-square-foot (sf) office complex in Wilmington, Delaware. The loan transferred to special servicing in March 2022 for failing to comply with cash management provisions following the notice of nonrenewal by the collateral's former largest tenant, E.I. Dupont (26.6% of NRA). Per the special servicer commentary, cash management is now in place and the special servicer is preparing to return the loan to the master servicer. As of April 2023, the loan reported $559,000 in lockbox receipts and $230,000 across rollover reserves and capital expenditure reserves. Following the departure of E.I. Dupont at its lease expiry in December 2022, collateral occupancy has declined to approximately 69.1%, and tenants representing 21.8% of NRA have lease expires in the next 12 months. According to the trailing nine-month financials ended September 30, 2022, the loan reported a DSCR of 2.36x; however, with the loss of E.I. Dupont, cash flow is expected to decline in 2023 as the tenant comprised 28.5% of the property's base rent, with an implied DSCR estimated at 1.49x. Given the expected decline in performance in 2023, DBRS Morningstar analyzed this loan with an elevated probability of default and stressed LTV, resulting in an expected loss 165.0% greater than the pool's weighted-average expected loss and nearly 100.0% greater than the loan's original baseline expected loss. The second-largest loan in special servicing, Anchorage Business Park (Prospectus ID#11, 2.2% of the pool), is secured by a 176,799-sf Class C office property in Anchorage, Alaska. Performance of the underlying property has declined with occupancy dropping to 64.2% as per the trailing nine-month financials ended September 30, 2022. The asset is REO and, according to the October 2022 appraisal, was valued at $13.0 million, which reflects a 61.5% decrease from the issuance value of $33.8 million and is well below the current loan amount of $21.5 million. DBRS Morningstar analyzed this loan with a liquidation scenario, resulting in a loss severity in excess of 70.0%. Notes: All figures are in U.S. dollars unless otherwise noted. CREW ENERGY: DBRS Hikes Issuer Rating to B(high), Trend Stable -------------------------------------------------------------- DBRS Limited upgraded the Issuer Rating of Crew Energy Inc. to B (high) with a Stable trend from B with a Positive trend. DBRS Morningstar has also discontinued the rating on the Senior Unsecured Notes (Notes) as a result of the early redemption of the remaining Notes outstanding. The upgrade in the Issuer Rating is because of the material improvement in the Company's credit metrics resulting primarily from stronger commodity prices, higher production volumes and lower indebtedness. Key factors supporting the rating are (1) the Company's size (2023 production estimated at 31,000 barrels of oil equivalent per day (boe/d) based on the midpoint of Crew's guidance); (2) capital and operational flexibility; and (3) significant inventory of economic drilling opportunities that enables the Company to maintain or grow production. Factors limiting the ratings include the high concentration of reserves and production in the Montney region in Northeastern British Columbia and a high percentage of lower-valued Western Canadian natural gas (78% on a boe basis in 2022) in the production mix. However, the Company has achieved better gas price realizations relative to Western Canadian spot prices. Crew has secured egress transportation capacity to sell gas into higher-priced markets across North America and has a higher heat content associated with its produced gas. The Company's key credit metrics strengthened considerably in 2022 mainly from (1) liquids and natural gas prices continuing to rise from the weak Coronavirus Disease (COVID-19) pandemic-induced levels in 2020; (2) increased production volumes (a 26% increase) ; (3) lower unit operating costs; and (4) lower levels of debt. The Company generated a large free cash flow surplus (FCF; i.e., cash flow after dividend and capital expenditures (capex)) in 2022 of $149 million and garnered $130 million of cash from the disposition of noncore assets. The Company used the additional cash to reduce debt including redeeming $128 million of Notes and reducing drawings on the Company's credit facility to nil. On April 28, 2023, the Company redeemed the remaining $172 million Notes outstanding with available cash on hand ($55 million at YE2022) and by drawing on the Company's $200 million credit Facility. Even though cash flow for 2023 is expected to moderate from last year's elevated level, DBRS Morningstar expects the Company's credit metrics to remain strong as debt is reduced further. The Company plans capex (before dispositions) of between $190 million and $210 million, which is modestly higher relative to last year. Based on DBRS Morningstar's price forecast and average production volumes of 31,000 boe/d, a modest FCF surplus is anticipated. The Company recently put forward a plan to increase production to more than 60,000 boe/d in 2026 if market conditions are favorable. A further upgrade is not likely over the near term. However, should liquids and natural gas prices fall materially and remain weak for an extended period of time, a negative rating action could ensue. Notes: All figures are in Canadian dollars unless otherwise noted. D FINDLEY: Seeks Court Approval to Hire Tax Professional -------------------------------------------------------- D Findley Construction, LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of Arkansas to employ Heather Worrell, a tax professional in Hot Springs, Ark. Ms. Worrell will be paid as follows for her services: a. $250 per month for monthly bookwork b. $50 to setup and $10 to prepare each Form 1099 c. Hourly billing rate of $50 d. Flat fees for tax returns based on forms used In court papers, Ms. Worrell disclosed that she is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. Ms. Worrell can be reached at: Heather A Worrell 929 Airport Rd #202 Hot Springs, AR 71913 Tel: (501) 262-1040 Email: ataxhaven@gmail.com About D Findley Construction D Findley Construction, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Ark. Case No. 22-12060) on July 29, 2022, with up to $50,000 in assets and up to $500,000 in liabilities. Danny Findley, member and owner of D Findley, signed the petition. Judge Bianca M. Rucker oversees the case. Brandon Haubert, Esq., at WH Law is the Debtor's counsel. DAVID'S BRIDAL: US Trustee Says Consultant Can't Bid in Chapter 11 ------------------------------------------------------------------ The U.S. Trustee has objected to a proposed final order allowing a David's Bridal LLC consultant to bid on the company's assets in its Chapter 11 bankruptcy case, saying it was already hired to help liquidate inventory and is also a secured creditor. The United States Trustee filed an objection to the Debtors' motion for entry of a final order authorizing the Debtors to assume a Consulting Agreement with Gordon Brothers. The U.S. Trustee takes issue with a provision in the proposed Final Order that provides that nothing shall prevent (or be construed to prevent) Gordon Brothers or any of its affiliates from bidding on the Debtors' assets. The Final Order reaches further, expressly authorizing Gordon Brothers to bid on or otherwise acquire additional assets of the bankruptcy estate. At present, the Debtors are conducting a store inventory sale process, described as a "soft" sales approach, which is being conducted for the purpose of monetizing the Debtors' inventory. Consistent with the November 2022 loan and agreement with a Gordon Brothers affiliate, Gordon Brothers is serving as the Debtors' liquidation consultant. The sale process contains within it the optionality to transition to going-out-of-business sales, and in that event Gordon Brothers would continue as liquidation consultant in that capacity. At present, as a parallel sale process, the Debtors are also pursuing a going-concern sale with Houlihan Lokey as investment banker. The U.S. Trustee asserts that given this other contemporaneous sale process, Gordon Brothers cannot be authorized to later buy or acquire bankruptcy estate assets in these cases when the risk of it acting to further its own interests consistent with prior conduct is so great. The U.S. Trustee avers that for Gordon Brothers to continue to serve under the proposed Consulting Agreement, Gordon Brothers must be precluded from any additional roles in these cases, particularly from pivoting its role as seller of assets in its capacity as liquidation consultant to bidder or acquirer of estate assets later in the case. Through a loan-to-hire arrangement, Gordon Brothers secured its employment as the Debtors' liquidation consultant, when an affiliate of Gordon Brothers became part of the Debtors' secured debt structure. In November 2022, an affiliate of Gordon Brothers loaned the Debtors' $10.1 million, and in exchange for extending that loan, the Debtors agreed that Gordon Brothers would be engaged as the Debtors' liquidation consultant. Gordon Brothers had an exclusive position here, secured by an affiliate who is a lender to the Debtors, free from competing proposals from any other liquidator consultant. "Gordon Brothers serving as both secured creditor and liquidation consultant in one hand, and then being authorized to acquire additional further roles including bidder for assets in the other hand, creates an actual conflict of interest, or at the minimum an appearance of impropriety. Where there is an actual conflict of interest, no amount of disclosure can act to permit approval of the tainted transaction, as held by Judge Walrath in In re Coram Healthcare Corp. 271 B.R. at 239. Here, a conflict exists because Gordon Brothers locked itself in to being the Debtors' liquidation consultant, free from competition from other liquidator consultants. The Debtors assert that the terms of the Consultant Agreement were negotiated at arm's-length; however, they were negotiated with the only liquidation consultant the Debtors were able to engage. It is a direct and actual conflict for Gordon Brothers, through an affiliate entity, to engage in secured lending and in consideration for such loan lock-up their engagement as liquidator consultant, and then bid on the assets they are engaged to liquidate on behalf of creditors. Having steered business to itself once before, the instant relief now asks the Court to authorize conduct that permits Gordon Brothers and its affiliates to shape transactions to their benefit. The Debtors' proposed Investment Banker, Houlihan Lokey, is set to earn a $1.75 million fee, if transactions are shaped to permit Gordon Brothers to liquidate the remaining inventory," the U.S. Trustee said in court filings. 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. DIOCESE OF ALBANY: Tort Panel Taps Saunders Kahler as Local Counsel ------------------------------------------------------------------- The official committee of tort claimants of The Roman Catholic Diocese of Albany, New York seeks approval from the U.S. Bankruptcy Court for the Northern District of New York to employ Saunders Kahler, LLP as local counsel. The firm's services include: a. consulting with the Debtor and the Office of the United States Trustee regarding administration of the Chapter 11 case; b. advising the tort committee with respect to its rights, powers and duties as they relate to the case; c. investigating the acts, conduct, assets, liabilities, and financial condition of the Debtor; d. assisting the committee in analyzing the Debtor's pre-bankruptcy and post-petition relationships with its creditors, equity interest holders, employees, and other parties involved in the case; e. assisting and negotiating in matters relating to the claims of the Debtor's other creditors; f. assisting the committee in preparing pleadings and applications; g. researching, analyzing, investigating, filing, and prosecuting litigation on behalf of the committee in connection with the issues, including, but not limited to, avoidance actions or fraudulent conveyances; h. representing the committee at hearings and other proceedings; i. reviewing and analyzing applications, orders, statements of operations and schedules filed with the court, and advising the committee regarding all such materials; j. aiding and enhancing the committee's participation in formulating a plan of reorganization; k. assisting the committee in advising its constituents of its decisions, including the collection and filing of acceptances and rejections to any proposed plan; l. negotiating and meditating issues relating to the value and payment of claims held by the committee's constituency; and m. other legal services. The firm will be paid at these rates: Partners $305 to 350 per hour Associates $250 to $275 per hour Paralegals $125 to $175 per hour Merritt Locke, Esq., a partner at Sanders Kahler, disclosed in a court filing that the firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached at: Merritt S. Locke, Esq. Sanders Kahler, LLP 185 Genesee Street, Suite 1400 Utica, NY 13501 Tel: (315) 733-0419 Fax: (315) 724-8522 Email: mlocke@saunderskahler.com About The Roman Catholic Diocese of Albany The Roman Catholic Diocese of Albany is a religious organization in Albany, N.Y. It covers 13 counties in Eastern New York, including a portion of a 14th county. Its Mother Church is the Cathedral of the Immaculate Conception in the city of Albany. New York's Child Victims Act, which took effect in August 2019, temporarily sets aside the usual statute of limitations for lawsuits to give victims of childhood sexual abuse a year to pursue even decades-old claims. Hundreds of new lawsuits have been filed against churches and other institutions since the law took effect on Aug. 14, 2019. Facing the financial weight of new sexual misconduct lawsuits, at least four of the eight Roman Catholic dioceses in the state, has already sought Chapter 11 protection. The dioceses that have declared bankruptcy include the Diocese of Rochester and the Diocese of Rockville Centre on Long Island. The Catholic Diocese of Albany sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D.N.Y. Case No. 23-10244) on March 15, 2023. In the petition filed by Fr. Robert P. Longobucco, the Debtor estimated assets between $10 million and $50 million and liabilities between $50 million and $100 million. Judge Robert E. Littlefield, Jr. oversees the case. The Debtor tapped Nolan Heller Kauffman, LLP as bankruptcy counsel; Tobin and Dempf, LLP as special litigation counsel; and Keegan Linscott & Associates, PC as financial advisor. Donlin, Recano & Company, Inc. is the claims and noticing agent. On April 17, 2023, the U.S. Trustee for Region 2 appointed two separate committees to represent unsecured creditors and tort claimants in the Debtor's Chapter 11 case. Lemery Greisler, LLC represents the unsecured creditors' committee. Stinson, LLP and Saunders Kahler, LLP serve as the tort committee's bankruptcy counsel and local counsel, respectively. DIOCESE OF SANTA ROSA: Taps Foley & Lardner as Litigation Counsel ----------------------------------------------------------------- The Roman Catholic Bishop of Santa Rosa seeks approval from the U.S. Bankruptcy Court for the Northern District of California to employ Foley & Lardner, LLP as special litigation counsel. The Debtor requires legal advice on litigation issues, discovery, and abuse claim issues arising in its Chapter 11 case including, but not limited to, adversary proceedings. The firm will be paid at these rates: Jeffrey R. Blease, Partner $1,150 per hour Lisa F. Glahn, Partner $1,000 per hour Thomas F. Carlucci, Partner $1,200 per hour Alan R. Ouellette, Senior Counsel $750 per hour Kerry A. Farrar, Paralegal $375 per hour The retainer fee is $50,000. Jeffrey Blease, Esq., a partner at Foley & Lardner, disclosed in a court filing that his firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached at: Jeffrey R. Blease, Esq. Foley & Lardner, LLP 555 California Street, Suite 1700, San Francisco, CA 94104, Tel: (415) 984-9868 Email: jblease@foley.com About The Roman Catholic Bishop of Santa Rosa The Roman Catholic Bishop of Santa Rosa is a diocese, or ecclesiastical territory, of the Roman Catholic Church in the northern California region of the United States, named in honor of St. Rose of Lima. Abuse victims filed hundreds lawsuits after the state of California paused for three years its statute of limitation on claims for child sexual abuse. The pause ended on Dec. 31, 2022. Facing more than 200 new legal claims over childhood sexual abuse, the Roman Catholic Bishop of Santa Rosa, also known as the Diocese of Santa Rosa, filed a Chapter 11 petition (Bankr. N.D. Calif. Case No. 23-10113) on March 13, 2023. The Debtor estimated $10 million to $50 million in both assets and liabilities. The Hon. Charles Novack is the case judge. The Debtor tapped Felderstein Fitzgerald Willoughby Pascuzzi & Rios, LLP as bankruptcy counsel; GlassRatner Advisory & Capital Group, LLC as financial advisor; and Donlin, Recano & Company, Inc. as claims agent. Shapiro Galvin Shapiro & Moran, Weinstein & Numbers, LLP, and Foley & Lardner, LLP serve as special counsels. The U.S. Trustee for Region 17 appointed an official committee to represent unsecured creditors in the Debtor's Chapter 11 case. Stinson, LLP is the committee's legal counsel. E.R. BAKEY: Wins Cash Collateral Access Thru June 6 --------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division, authorized E.R. Bakey, Inc. to use cash collateral on an interim basis in accordance with the budget, through June 6, 2023. The Debtor requires the use of cash collateral to finance its ongoing post-petition business operations. Harrington Bank & Trust Company has a valid blanket lien upon the assets of the Debtor as of the date of the filing of the petition herein, and the cash proceeds thereof. The Prepetition Secured Lender holds a security interest in all the assets of the Debtor by way of a valid lien duly filed of which the amount due and owing totals no less than $40,268. Other potential lien holders are as follows: a) Ace Funding Source b) U.S Small Business Administration c) On Deck Capital d) Pay Pal Credit e) WebBank In return for the Debtor's continued interim use of cash collateral, and for any diminution in value of lien holders' interest in the cash collateral from and after the petition date, the Prepetition Secured Lender and all Additional Lien Holders will receive an administrative expense claim pursuant to 11 U.S.C. section 507(b). In further return for the Debtor's continued interim use of cash collateral, the Prepetition Secured Lender and all Additional Lien Holders are granted a replacement lien in substantially all of the Debtor's assets, including cash collateral equivalents and the Debtor's cash and accounts receivable, among other collateral to the extent and validity as held pre-petition. The Debtor must maintain and pay premiums for insurance to cover the Collateral from fire, theft, and water damage, and the Prepetition Secured Lender and Additional Lien Holders consent to the payment of such premiums from their cash collateral. The Prepetition Secured Lender and all other Additional Lien Holders are granted replacement liens, attaching to the Collateral, but only to the extent of their pre-petition liens and only to the extent of priority that existed on the date of filing. This order is without prejudice to any future avoidance of any of the liens. A further hearing on the matter is set for June 6, 2023 at 1:30 p.m. A copy of the Court's order and the Debtor's budget is available at https://urlcurt.com/u?l=nGC8Gt from PacerMonitor.com. The Debtor projects $39,164 in total income and $19,292 in total expenses for one month. About E.R. Bakey, Inc. E.R. Bakey, Inc. is a subcontractor involved in material hauling for road projects involving the Illinois toll way system. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 23-06297) on May 12, 2023. In the petition signed by Eric Bakey, president, the Debtor disclosed up to $50,000 in assets and up to $1 million in liabilities. Judge Janet S. Baer oversees the case. Richard G Larsen, Esq., at SpringerLarsenGreene, LLC, represents the Debtor as legal counsel. ECHOSTAR CORP: Egan-Jones Retains BB- Senior Unsecured Ratings -------------------------------------------------------------- Egan-Jones Ratings Company on May 11, 2023, maintained its 'BB-' foreign currency and local currency senior unsecured ratings on debt issued by EchoStar Corporation. Headquartered in Englewood, Colorado, EchoStar Corporation operates satellite communication infrastructures. EDGEWELL PERSONAL: Egan-Jones Retains B Senior Unsecured Ratings ---------------------------------------------------------------- Egan-Jones Ratings Company on May 11, 2023, maintained its 'B' foreign currency and local currency senior unsecured ratings on debt issued by Edgewell Personal Care Company. Headquartered in Shelton, Connecticut, Edgewell Personal Care Company operates as a personal care company. EISNER ADVISORY: Fitch Affirms LongTerm IDR at 'B', Outlook Stable ------------------------------------------------------------------ Fitch Ratings has affirmed the Long-Term Issuer Default Rating (IDR) of Eisner Advisory Group, LLC (Eisner) at 'B' with a Stable Rating Outlook. Fitch has also affirmed the company's super senior revolver at 'BB'/'RR1' and secured term loans at 'B+'/'RR3'. TowerBrook Capital Partners (the sponsor) has a significant investment in Eisner. TowerBrook and Eisner plan to continue acquiring regional accounting firms or partnerships and additional wealth management groups. Since the LBO, Eisner has completed multiple acquisitions, and management has indicated that they may issue new debt if acquisition opportunities are appealing and appropriate. Fitch expects the debt level will be manageable unless rollup strategy becomes considerably more aggressive; however, Fitch will continue to monitor interest coverage given the higher rate environment. KEY RATING DRIVERS Middle Market Positioning: Eisner ranks in the top 20 public accounting firms according to industry estimates. It thus enjoys a strong position in the fragmented mid-tier accounting market, leveraging its widely known brand name while avoiding competition from the big four accounting firms. Mid-Single Digit Leverage: Fitch expects leverage to remain elevated over the rating horizon in the mid-single digits. Although the sponsor has not indicated a clear financial policy, Fitch believes the company will likely continue to pursue acquisitions in the foreseeable future. With leverage in the mid-single digits and an ongoing rollup strategy, Fitch believes the company is limited to the 'B' rating category. Highly Recurring Revenue Model: Eisner's credit profile benefits from highly recurring revenue streams driven by strong customer retention. For the fiscal year ended July 31, 2022, the company had a revenue retention rate of over 90% and an average client tenure of approximately nine years. Client retention is aided by cross selling clients on multiple business lines, leading to deeper customer relationships. Diversified Business Lines and Client Base: Eisner services over 18,000 customers globally, with the top 10 customers making up less than 10% of overall revenues. Additionally, the company has multiple business lines across audit, tax, and advisory services. The largest sector, financial services, constitutes approximately 35% of total revenues with other clients spread across diverse end markets. Inelastic Demand for Services: Most audits and tax services offered by the firm are rarely discretionary. Material disruption resulting from cyclicality is unlikely, given the critical role of audited financials (capital market) and tax filings (IRS). Fitch believes the demand for advisory services is more volatile than the demand for the tax and audit services, but this is somewhat mitigated by the Advisory and Private Business Services segments making up less than 30% of overall company revenues, and Fitch expects this percentage to decline since the acquisition targets are typically focused on audit and tax services. DERIVATION SUMMARY Eisner is well positioned compared with peers in the middle market for accounting services, of which Fitch rates none, but compares less favorably with the big four accounting firms. Margins at Eisner are significantly lower than the 30% margins at big four peers due to decreased operating leverage as well as the new partner compensation strategy that places partner compensation before EBITDA. Eisner also has a large debt stack due to its LBO, although Fitch expects the leverage is manageable unless there is a material change. KEY ASSUMPTIONS Fitch's Key Assumptions Within the Rating Case for the Issuer - Organic Revenue Growth of 3% to 4% over the rating horizon; - EBITDA margins held in the mid to high teens. KEY RECOVERY ASSUMPTIONS Fitch's recovery analysis assumes the company will be reorganized as a going concern in the event of the bankruptcy rather than liquidated. The going-concern analysis assumes a decline in EBITDA to reflect the stress that provoked the bankruptcy as well as an amount of corrective action taken before emergence from bankruptcy. The going-concern analysis contemplates a scenario in which a high-profile audit mistake drives business away from the company, resulting significant revenue decline, including the loss of recently acquired clients. The resulting estimate of GC EBITDA of $85 million is significantly below the prior fiscal year, which is an output of the analysis not an input. The recovery multiple of 6.0 reflects several factors, including the stable recurring revenue nature of the accounting business as well as Eisner's favorable positioning in the fragmented market for mid-tier accounting services while also recognizing the low growth nature of the accounting industry. The company's debt balance at the time of default is estimated to be $787 million. Fitch assumes a full draw on the company's $50 million revolver. Using a 6.0x emergence multiple, $85 million in going-concern EBITDA and 10% administration claims, Fitch arrives at $459 million available for recovery. Applying this amount to the super priority revolver leads to a recovery of 'RR1'/100%' with the remainder being applied to the $737 million in senior secured term loans for a recovery of 'RR3'/55%. Applying standard notching criteria to the recommended IDR of 'B' leads to ratings of 'BB'/'RR1'/100% on the super priority revolver and 'B+'/'RR3'/55% on the company's senior secured term loans. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Fitch's expectation of leverage, as measured by debt to EBITDA maintained below 5.0x; - Fitch's expectation of EBITDA margins maintained in the mid to high teens on a sustained basis. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Fitch's expectation that leverage will be maintained above 6.0x; - Fitch's expectation of EBITDA margins falling into the low teens or single digits on a sustained basis; - EBITDA interest coverage sustained below 2.0x. LIQUIDITY AND DEBT STRUCTURE Moderate Debt Balance: Eisner has 1L term loans of approximately $730 million, which results in pro forma leverage just below 6.0x. Fitch expects this leverage to trend downward as the recent acquisitions are fully integrated and Eisner benefits from the additional EBITDA. Adequate Liquidity: Fitch projects that Eisner will generate adequate FCF over the rating horizon, with the potential of achieving more than $50 million annually in the next two to three years. Eisner also has full availability of its $50 million revolver. However, Fitch expects the Sponsor and management to continue the roll-up strategy, using available cash for additional acquisitions rather than debt paydown. ISSUER PROFILE Eisner Advisory Group is a middle-market U.S. professional services firm with a national platform and global presence. The company has a full suite of accounting, tax and advisory services with over 12,000 clients across multiple industries. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Eisner Advisory Group, LLC LT IDR B Affirmed B senior secured LT B+ Affirmed RR3 B+ super senior LT BB Affirmed RR1 BB EMBARK TECHNOLOGY: Settles Investors' Suit, Sells to Applied ------------------------------------------------------------ Martina Barash of Bloomberg Law reports that truck manufacturer Embark Technology Inc. has settled with investors. Embark Technology is likely to seek bankruptcy protection or close down, the autonomous truck company's shareholders told a federal court when requesting preliminary approval of a $2.5 million securities settlement that represents just 1.1% of their estimated losses. The amount "presents a substantial benefit" to the proposed class of investors, the Company said in a brief to the US District Court for the Northern District of California on Wednesday, May 17, 2023. Embark develops self-driving software solutions for the trucking industry. On Nov. 10, 2021, the Company merged with Embark Trucks Inc and changed its name from "Northern Genesis Acquisition Corp. II" to "Embark Technology, Inc." On Jan. 6, 2022, The Bear Cave published a short report entitled "Problems at Embark Technology (EMBK)," which alleged, among other issues, "that Embark appears to lack true economic substance," that its "current evaluation appears to be based on puffery rather than actual substance", and that "[t]he company holds no patents, has only a dozen or so test trucks, and may be more bark than bite." On this news, the price of Embark shares declined by $1.37 per share, or approximately 16.75%, from $8.18 per share to close at $6.81 per share on Jan. 6, 2022. The lawsuit alleges that the Defendants failed to disclose that: (i) the Company had performed inadequate due diligence into Embark in connection with the merger; (ii) Embark held no patents and an insignificant amount of test trucks; and (iii) accordingly, the Company had overstated its operational and technological capabilities. Merger With Applied Intuition Applied Intuition, Inc., a tooling and software provider for autonomous vehicle development, and Embark Technology, Inc. (NASDAQ: EMBK) announced May 25, 2023, that the companies have entered into a definitive merger agreement. Under the agreement, Applied will acquire Embark in an all-cash transaction with an equity value of approximately $71 million. Applied aims to integrate Embark's internal tools, data, and software assets to further improve its offerings for customers in the trucking and automotive industries. Embark plans to retire its fleet of test vehicles as part of the transaction. Key Embark employees are expected to remain to support Applied and expand the company's suite of product offerings. Under the terms of the agreement, which has been approved unanimously by the boards of directors of both companies, Embark shareholders will receive $2.88 per share in cash. The agreement comes after Embark's March 3, 2023 announcement that it was engaging in a process to explore, review, and evaluate a range of potential strategic alternatives. The transaction is expected to close in Q3 2023 and is subject to approval by Embark shareholders and other customary closing conditions. Upon completion of the transaction, Embark shares and warrants will cease trading on NASDAQ, and Embark will become a privately held company. Goodwin Procter LLP is serving as legal counsel to Applied Intuition. Evercore is serving as financial advisor and Wilson Sonsini Goodrich & Rosati, P.C. is serving as legal counsel to Embark and its Transaction Committee. Houlihan Lokey provided additional financial advisory services to Embark's Transaction Committee. About Embark Technology Founded in 2016, Embark has built a robust autonomous software stack that uses machine learning methodologies for perception while relying on a safety-redundant compute system. Embark also developed a custom-built hardware platform optimized for autonomy and has performed extensive real-world testing and system deployment, with over 1.5 million miles of autonomous operations conducted on highways. ENDO INTERNATIONAL: Operand Entities' Chapter 11 Case Summary ------------------------------------------------------------- Two affiliates of Endo International that filed bankruptcy petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- Operand Pharmaceuticals Holdco II Limited 23-10838 First Floor, Minerva House, Simmonscourt Road Ballsbridge, Dublin 4, D04H9P8, Republic of Ireland Operand Pharmaceuticals Holdco III Limited 23-10839 First Floor, Minerva House, Simmonscourt Road Ballsbridge, Dublin 4, D04H9P8, Republic of Ireland Business Description: Endo International plc is a generics and branded pharmaceutical company. It develops, manufactures, and sells branded and generic products to customers in a wide range of medical fields, including endocrinology, orthopedics, urology, oncology, neurology, and other areas. The Debtors' cases are jointly administered under Case No. 22-22549. Chapter 11 Petition Date: May 25, 2023 Court: United States Bankruptcy Court Southern District of New York Judge: Hon. James L. Garrity Jr. Debtors' Counsel: Paul D. Leake, Esq. Lisa Laukitis, Esq. Shana A. Elberg, Esq. Evan A. Hill, Esq. SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP One Manhattan West New York, New York 10001-8602 Tel: (212) 735-3000 Email: Paul.leake@skadden.com lisa.laukitis@skadden.com shana.elberg@skadden.com evan.hill@skadden.com Debtors' Irish Legal Counsel: A&L GOODBODY LLP Debtors' Financial Advisor: ALVAREZ & MARSAL HOLDINGS, LLC Debtors' Investment Banker: PJT PARTNERS L.P. Debtors' Claims & Noticing Agent and Administrative Advisor: KROLL, LLC Estimated Assets: $1 billion to $10 billion* * Represents consolidated financial information for the Debtor and its affiliated debtor entities that filed on August 16, 2022. This does not constitute a statement or admission as to the assets of any of the debtor entities individually. Estimated Liabilities: $0 to $50,000* * As of the filing of this Petition, the Debtor is not anticipated to have any liabilities The petitions were signed by Mark T. Bradley as chief financial officer. The Debtors disclosed they don't have any creditors holding unsecured claims. Full-text copies of the petitions are available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/BDOGC2Q/Operand_Pharmaceuticals_Holdco__nysbke-23-10838__0001.0.pdf?mcid=tGE4TAMA https://www.pacermonitor.com/view/6S5J4MA/Operand_Pharmaceuticals_Holdco__nysbke-23-10839__0001.0.pdf?mcid=tGE4TAMA ESOURCE RESOURCES: Case Summary & 13 Unsecured Creditors -------------------------------------------------------- Debtor: Esource Resources, LLC 9800 Crosspoint Blvd Indianapolis, IN 46256 Business Description: Esource offers advisory services for optimal project, budget, and resource planning and roadmapping; software selection assistance; infrastructure refresh planning and execution; program integration; software build and testing; and training. Chapter 11 Petition Date: May 26, 2023 Court: United States Bankruptcy Court Southern District of Indiana Case No.: 23-02263 Judge: Hon. James M. Carr Debtor's Counsel: KC Cohen, Esq. KC COHEN, LAWYER, PC 1915 Broad Ripple Ave. Indianapolis, IN 46220 Tel: 317-715-1845 Email: kc@esoft-legal.com Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Eddie Rivers, Jr., as president. A full-text copy of the petition containing, among other items, a list of the Debtor's 13 unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/VKD5AWI/Esource_Resources_LLC__insbke-23-02263__0001.0.pdf?mcid=tGE4TAMA FARAJI ENTERPRISE: Deal Allows Cash Collateral Use Thru June 30 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois authorized Faraji Enterprise, LLC to use cash collateral on an interim basis in accordance with the budget and its agreement with Central Savings, F.S.B., through June 30, 2023. The Debtor asserts that it has an immediate need to use cash collateral to permit, among other things, the orderly continuation of the operation of its property, and avoid irreparable harm. The Debtor and Central Savings, F.S.B. are parties to a term loan dated March 16, 2017, evidenced by: a) a Promissory Note dated March 16, 2017 by and between Hirsch God Trust No. 469 as borrower and Central Federal FSB as Lender in the original principal amount of $390,000; b) a Mortgage recorded in the Office of the Cook County Recorder of Deeds on March 24, 2017, as Document No. 1708304073 and an Assignment of Rents dated March 16, 2017, which a was recorded in the Office of the Cook County Recorder of Deeds on March 24, 2017 as Document No. 1708304074, each encumbering the real property and rental income from property commonly known as 469-473 Hirsch Avenue Calumet City, IL 60409; and c) a Guaranty of Payment and Performance of all Loan obligations by Faraji Enterprises, LLC dated March 16, 2017. As of the Petition Date, the Debtor owed Central Savings, F.S.B. not less than $408,160 inclusive of interest owed and accrued under the Loan. To adequately protect the lender for the Debtor's use of cash collateral, Central Savings, F.S.B. is granted a replacement lien on the Debtor's rents, accounts and accounts receivables, wherever located to secure the Indebtedness to the extent of any diminution in value of the Pre-Petition Collateral, subject only to valid and enforceable liens and security interests existing on the Debtor's property, assets, or rights of the Debtor at the time of the commencement of the Case. As further adequate protection, the Debtor will grant Central Savings, F.S.B., a replacement lien on the Debtor's rents, accounts, and accounts receivables derived from the Property, which are of the same type or nature as the Pre-Petition Collateral, coming into existence or acquired by the Debtor respecting the Property on or after the Petition Date. The Post-Petition Liens granted to Central Savings, F.S.B. under the terms of the Order will be valid and perfected as of the date of the Order, without the need for the execution or filing of any further document or instrument otherwise required to be executed or filed under applicable non-bankruptcy law. The Debtor's authority to use cash collateral will terminate on the earlier of: (a) the date of entry by the Court of an order modifying or otherwise altering the effectiveness of the Order; (b) an Event of Default; or (c) the expiration of the Budget Period. These events constitute an Event of Default: (a) Entry of an order converting the Debtor's Chapter 11 case to a case under Chapter 7 of the Bankruptcy Code, which order is not stayed within 10 days of the entry of such order; (b) The entry of an order dismissing the Debtor's Chapter 11 case, which is not stayed within 10 days of the entry of such order; and (c) The Debtor's failure to comply with any provision of the Order. A further hearing on the matter is set for June 21, 2023 at 10:45 a.m. A copy of the Court's order and the Debtor's budget is available at https://urlcurt.com/u?l=1hjeO9 from PacerMonitor.com. About Faraji Enterprise Faraji Enterprise, lLLC sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 22-14998) on Dec. 30, 2022, with $500,001 to $1 million in assets and $100,001 to $500,000 in liabilities. Judge Deborah L. Thorne oversees the case. William E. Jamison, Jr., Esq., at the Law Office William E. Jamison, represents the Debtor as legal counsel. FIRST REPUBLIC: Sen. Warren Slams Regulators Over Sale to JPMorgan ------------------------------------------------------------------ United States Senator Elizabeth Warren (D-Mass.), a member of the Senate Banking, Housing, and Urban Affairs Committee, sent a letter to Martin Gruenberg, Chair of the Federal Deposit Investment Corporation (FDIC) and Michael Hsu, Acting Comptroller of the Currency, questioning the terms of the deal and the rationale behind the FDIC and Office of the Comptroller of the Currency's (OCC) approval of the sale of First Republic Bank (First Republic) to JPMorgan Chase (JP Morgan). "The executives at First Republic -- who took excessive risks and did not appropriately manage them as interest rates increased throughout 2022 and 2023 -- bear primary responsibility for this failure... But the outcome of this seizure and sale were deeply troubling: it resulted in a $13 billion cost to the Federal Deposit Insurance Fund -- which will ultimately be passed on to ordinary bank consumers across the country -- and made JPMorgan, the nation's biggest bank, even bigger. JPMorgan will also record a $2.6 billion gain from the deal," wrote Senator Warren. Senator Warren's first set of questions concern why the Federal Deposit Insurance Fund was allowed to take a $13 billion loss while the FDIC deal made nearly $50 billion worth of uninsured depositors at First Republic whole. "Under the law, the FDIC is required to resolve bank failures at the least cost to the insurance fund. But that did not appear to happen here -- instead, the FDIC appeared to prioritize First Republic's uninsured deposits at the bank before the Insurance Fund, while accepting losses to the Fund. The FDIC, with the Federal Reserve and Treasury Department, can avoid taking the least-cost route and guarantee uninsured accounts if it declares a systemic risk exception because of a threat to the financial system. The FDIC used this approach to guarantee depositors for uninsured funds in the aftermath of the failures of Silicon Valley Bank and Signature Bank – but did not do so for First Republic," wrote Senator Warren. Senator Warren's next set of questions concern the decision to choose too-big-to-fail JPMorgan, already the nation's largest bank, to acquire First Republic and become even bigger. The FDIC reportedly received multiple bids to take over First Republic, and JP Morgan's acquisition could earn it up to $1 billion annually. "Under the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, a bank holding company may not consummate a merger that would result in the bank holding more than 10% of the nation's total deposits -- a standard that JPMorgan already exceeds. However, because Riegle-Neal includes an exception for failed banks, the OCC has indicated that it did not need to take any action because the statute automatically provides a waiver," continued Senator Warren. "The net result of these machinations is that, without a complete regulatory review, and at a cost of $13 billion to the Federal Deposit Insurance Fund, the nation's biggest bank -- already too big to fail -- got a bargain deal on a failing bank that made it even bigger. This is a troubling outcome, leaving me with numerous questions," concluded Senator Warren. Given her concerns, Senator Warren is asking the FDIC and OCC to answer a set of questions by May 31, 2023 and come prepared to answer her question at a Senate Banking, Housing, and Urban Affairs Committee hearing on May 18, 2023. About First Republic Bank First Republic Bank is a commercial bank and provider of wealth management services headquartered in San Francisco. It caters to high-net-worth individuals. It operates 93 offices in 11 states primarily in New York, California, Massachusetts, and Florida. CBS News reports that the sudden collapse of Silicon Valley Bank (SVB) on March 10, 2023, along with New York's Signature Bank two days later, has shaken investor confidence in regional lenders like $213 billion First Republic. In particular, concern has focused on such lenders' uninsured deposits, or account funds exceeding the Federal Deposit Insurance Corp.'s $250,000 cap. First Republic Bank on March 16, 2023, received a $30 billion rescue package from 11 of the biggest U.S. banks in an effort to prevent its collapse. JPMorgan Chase, Bank of America, Citigroup and Wells Fargo have agreed to each put $5 billion in uninsured deposits into First Republic. Meanwhile Morgan Stanley and Goldman Sachs would deposit $2.5 billion each into the bank. The remaining $5 billion would consist of $1 billion contributions from BNY Mellon, State Street, PNC Bank, Truist and US Bank. First Republic has tapped investment bank Lazard Ltd to help it explore strategic options, the Wall Street Journal reported. The Federal Deposit Insurance Corporation announced May 1, 2023, that First Republic Bank, San Francisco, California, was closed by the California Department of Financial Protection and Innovation, which appointed the FDIC as receiver. To protect depositors, the FDIC entered into a purchase and assumption agreement with JPMorgan Chase Bank, National Association, Columbus, Ohio, to assume all of the deposits and substantially all of the assets of First Republic Bank. FREE SPEECH: Court OKs Continued Cash Collateral Access ------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas, Victoria Division, authorized Free Speech Systems, LLC to use cash collateral on an interim basis in accordance with the budget, with a 20% variance. The Court directed the Debtor to maintain debtor-in-possession accounts at Axos Bank, which accounts will contain all operating revenues and any other source of cash constituting cash collateral, which is (or has been) generated by and is attributable to the Debtor's business. Other than as provided for in the Budget, the Debtor will not make any payment to or for the benefit of any insider of the Debtor, either directly or indirectly, as that term is defined in 11 U.S.C. section 101(31). In addition, no payments to any insider during the Interim Period will exceed $10,000. The Debtor will reserve $5,000 per week during the Interim Period for adequate protection to PQPR, but will not pay the reserved amount to PQPR unless authorized by further orders of the Court. Nothing will constitute an admission that PQPR is or is not entitled to receive any adequate protection payment on account of its claims. Moreover, nothing will prejudice the rights of any party-in-interest, including but not limited to the Debtor, any creditor, or PQPR to challenge or assert PQPR's entitlement to receive an adequate protection payment. A further interim hearing on the matter is set for June 29, 2023 at 11 a.m. A copy of the Court's order and the Debtor's budget is available at https://urlcurt.com/u?l=AnekUl from PacerMonitor.com. The budget provides for total operating expenses, on a weekly basis, as follows: $618,560 for the week ending June 4, 2023; $56,600 for the week ending June 11, 2023; $326,110 for the week ending June 18, 2023; $22,050 for the week ending June 26, 2023; and $256,160 for the week ending June 26, 2023. About Free Speech Systems Free Speech Systems LLC is a broadcast media production and distribution company that provides broadcasting aural programs by radio to the public. Free Speech Systems is a family-run business founded by Alex Jones. FSS is engaged in the business of producing and syndicating Jones' radio and video talk shows and selling products targeted to Jones' loyal fan base via the Internet. FSS produces Alex Jones' syndicated news/talk show (The Alex Jones Show) from Austin, Texas, which airs via the Genesis Communications Network on over 100 radio stations across the United States and via the internet through websites including Infowars.com. Due to the content of Alex Jones' shows, Jones and FSS have faced an all-out ban of Infowars from mainstream online spaces. Shunning from financial institutions and banning Jones and FSS from major tech companies began in 2018. Jones, a conspiracy theorist, has been sued by victims' family members over Jones' lies that the 2012 Sandy Hook Elementary School shooting was a hoax. Jones' InfoW LLC and affiliates, IWHealth, LLC and Prison Planet TV, LLC, filed petitions under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 22-60020) on April 18, 2022. The Debtors agreed to the dismissal of the Chapter 11 cases in June 2022 after the Sandy Hook victim families dismissed the three bankrupt companies from their lawsuits. Free Speech Systems filed a voluntary petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 22-60043) on July 29, 2022. In the petition filed by W. Marc Schwartz, as chief restructuring officer, the Debtor reported assets and liabilities between $50 million and $100 million. Melissa A. Haselden has been appointed as Subchapter V trustee. Alexander E. Jones filed for personal bankruptcy under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 22-60043) on Dec. 2, 2022, listing $1 million to $10 million in assets against liabilities of $1 billion to $10 billion in liabilities. Raymond William Battaglia, Esq., at the Law Offices of Ray Battaglia, PLLC, is FSS's counsel. Raymond W. Battaglia and Crowe & Dunlevy, P.C., led by Vickie L. Driver, Christina W. Stephenson, Shelby A. Jordan, and Antonio Ortiz are representing Alex Jones. Judge Christopher Lopez oversees the FSS Chapter 11 case. FREE SPEECH: Judge Wants Chapter 11 Mediation Done by July ---------------------------------------------------------- Aaron Keller of Law360 reports that a bankruptcy judge in Texas on Friday asked attorneys to take 60 days to conclude mediation on Free Speech Systems LLC's $1.5 billion in non-dischargeable debts, setting a deadline of July 21 for the end of talks involving the company, long controlled by InfoWars host Alex Jones. About Free Speech Systems Free Speech Systems LLC is a broadcast media production and distribution company that provides broadcasting aural programs by radio to the public. Free Speech Systems is a family-run business founded by Alex Jones. FSS is presently engaged in the business of producing and syndicating Jones' radio and video talk shows and selling products targeted to Jones' loyal fan base via the Internet. Today, FSS produces Alex Jones' syndicated news/talk show (The Alex Jones Show) from Austin, Texas, which airs via the Genesis Communications Network on over 100 radio stations across the United States and via the internet through websites including Infowars.com. Due to the content of Alex Jones' shows, Jones and FSS have faced an all-out ban of Infowars from mainstream online spaces. Shunning from financial institutions and banning Jones and FSS from major tech companies began in 2018. Conspiracy theorist Alex Jones has been sued by victims' family members over Jones' lies that the 2012 Sandy Hook Elementary School shooting was a hoax. Jones' InfoW LLC and affiliates, IWHealth, LLC and Prison Planet TV, LLC, filed petitions under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 22-60020) on April 18, 2022. The Debtors agreed to the dismissal of the Chapter 11 cases in June 2022 after the Sandy Hook victim families dismissed the three bankrupt companies from their lawsuits. Free Speech Systems filed a voluntary petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 22-60043) on July 29, 2022. In the petition filed by W. Marc Schwartz, as chief restructuring officer, the Debtor reported assets and liabilities between $50 million and $100 million. Melissa A Haselden has been appointed as Subchapter V trustee. Alexander E. Jones filed for personal bankruptcy under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 4:22-bk-60043) on Dec. 2, 2022, listing $1 million to $10 million in assets against liabilities of $1 billion to $10 billion in liabilities. Raymond William Battaglia, of Law Offices of Ray Battaglia, PLLC, is FSS's counsel. Raymond W. Battaglia and Crowe & Dunlevy, P.C., led by Vickie L. Driver, Christina W. Stephenson, Shelby A. Jordan, and Antonio Ortiz are representing Alex Jones. FTX GROUP: Lawyers Sue Former Execs. Over $220M Embed Deal ---------------------------------------------------------- Luke Huigsloot of CoinTelegraph reports that FTX lawyers are suing former CEO Sam Bankman-Fried, co-founder Zixiao Wang, and former senior executive Nishad Singh over the $220 million acquisition of stock-clearing platform Embed, alleging lack of due diligence. According to a May 17, 2023 filing, FTX had paid $220 million to acquire Embed through its United States subsidiary after having allegedly "performed almost no due diligence" on the platform. After FTX filed for bankruptcy, the judge in charge of the proceedings approved the sales of Embed and other assets of FTX, but the top bidder for the platform offered just $1 million, with FTX's lawyers stating: "The bidders had figured out what the FTX Group and FTX Insiders did not bother to assess prior to the Embed acquisition, namely, that Embed's vaunted software platform was essentially worthless." While 12 entities had submitted non-binding indications of interest -- the largest of which was $78 million -- all but one declined to submit a final bid after conducting more comprehensive due diligence: Embed's founder and former CEO, Michael Giles." According to FTX's lawyers, Giles had "personally received approximately $157 million in connection with the acquisition," but his final bid to regain ownership of Embed was a paltry $1 million, subject to reductions at closing. The lawyers additionally accused the FTX insiders of taking "advantage of the FTX Group's lack of controls and recordkeeping to perpetrate a massive fraud" by using misappropriated customer funds to facilitate the purchase of Embed, while fully aware that the company was insolvent when finalizing the deal. The lawyers further alleged that misleading records were created to obscure Alameda Research's role in funding the Embed acquisition, claiming funds had been transferred between FTX entities, not from Bankman-Fried, Singh and Wang as claimed. FTX wants the transactions to be labeled as "avoidable fraudulent transfers and obligations, and/or preferences," in addition to having claims made by the defendants disallowed until FTX can recoup the funds lost through avoidable transfers. FTX filed for bankruptcy on November 11, 2022, and since then, its new leadership has been focused on clawing back funds to repay customers and creditors. It has also been considering a possible relaunch of the exchange. About FTX Group FTX is the world's second-largest cryptocurrency firm. FTX is a cryptocurrency exchange built by traders, for traders. FTX offers innovative products including industry-first derivatives, options, volatility products and leveraged tokens. Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that FTX paused customer withdrawals after it was hit with roughly $5 billion worth of withdrawal requests. Faced with liquidity issues, FTX on Nov. 9 struck a deal to sell itself to its giant rival Binance, but Binance walked away from the deal amid reports on FTX regarding mishandled customer funds and alleged US agency investigations. At 4:30 a.m. on Nov. 11, Bankman-Fried ultimately agreed to step aside, and restructuring vet John J. Ray III was quickly named new CEO. FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc. (d/b/a FTX US), Alameda Research Ltd. and certain affiliated companies then commenced Chapter 11 proceedings (Bankr. D. Del. Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022. Additional entities sought Chapter 11 protection on Nov. 14, 2022. FTX Trading and its affiliates each listed $10 billion to $50 million in assets and liabilities, making FTX the biggest bankruptcy filer in the US this year. According to Reuters, SBF shared a document with investors on Nov. 10, 2022, showing FTX had $13.86 billion in liabilities and $14.6 billion in assets. However, only $900 million of those assets were liquid, leading to the cash crunch that ended with the company filing for bankruptcy. The Hon. John T. Dorsey is the case judge. The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel; Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal North America, LLC as financial advisor. Kroll is the claims agent, maintaining the page https://cases.ra.kroll.com/FTX/Home-Index The Official Committee of Unsecured Creditors tapped Paul Hastings as counsel, FTI Consulting, Inc., as financial advisor, and Jefferies LLC as the investment banker. Young Conaway Stargatt & Taylor LLP is the Committee's Delaware and conflicts counsel. Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory T. Donilon, Edward L. Schnitzer, and David M. Banker, is representing Sam Bankman-Fried in the Chapter 11 cases. White-collar crime specialist Mark S. Cohen has reportedly been hired to represent SBF in litigation. Lawyers at Paul Weiss previously represented SBF but later renounced representing the entrepreneur due to a conflict of interest. GAP INC: Egan-Jones Retains B+ Senior Unsecured Ratings ------------------------------------------------------- Egan-Jones Ratings Company on May 9, 2023, maintained its 'B+' foreign currency and local currency senior unsecured ratings on debt issued by Gap, Inc. Headquartered in San Francisco, California, Gap, Inc. operates as a clothing retailer. GASPARILLA MOBILE: Taps Laura Trebing as Appraiser -------------------------------------------------- Gasparilla Mobile Estates, Inc. seeks approval from the U.S. Bankruptcy Court for the Middle District of Florida to employ Laura Trebing, M.A.I. to conduct an appraisal of its real property. The Debtor will pay the appraiser the sum of $6,000. As disclosed in court filings, Ms. Trebing is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. Ms. Trebing can be reached at: Laura P. Trebing, M.A.I. 4373 Pasadena CIR Sarasota FL 34233-1242 Tel: (941) 921-3782 About Gasparilla Mobile Estates Gasparilla Mobile Estates, Inc., is primarily engaged in renting and leasing real estate properties. The company is based in Placida, Fla. Gasparilla Mobile Estates filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-01267) on Dec. 22, 2022, with $10 million to $50 million in assets and $1 million to $10 million in liabilities. Michael C. Markham has been appointed as Subchapter V trustee. Judge Caryl E. Delano oversees the case. The Debtor is represented by Andrew J. McBride, Esq., at Adams and Reese, LLP. GRAYSON O CO: Court OKs Cash Collateral Access Thru July 7 ---------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of North Carolina, Statesville Division, authorized Grayson O Company to use cash collateral on an interim basis in accordance with the budget, through the date of the final hearing set for July 7, 2023 at 11 a.m. The Debtor is permitted to use cash collateral only for ordinary and necessary business expenses consistent with the specific items and amounts contained in the budget, with a 10% variance. As adequate protection for Newtek Small Business Finance, LLC's interest in cash collateral, Newtek is granted a valid, attached, choate, enforceable, perfected and continuing security interest in, and lien upon all post-petition accounts receivable and inventory of the Debtor. Newtek's security interest in, and lien upon, the Post-Petition Collateral will have the same validity as existed between Newtek, the Debtor, and all other creditors or claimants against the Debtor's estate on the Petition Date. A copy of the order and the Debtor's budget is available at https://urlcurt.com/u?l=36n1bw from PacerMonitor.com. The Debtor projects total cash collections, on a monthly basis, as follows: $250,000 for May 2023; and $180,000 for June 2023. About Grayson O Company Grayson O Company sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D.N.C. Case No. 23-50124) on May 15, 2023. In the petition signed by Jared Stamey, vice president, the Debtor disclosed up to $500,000 in assets and up to $10 million in liabilities. Richard S. Wright, Esq., at Moon Wright & Houston, PLLC, represents the Debtor as legal counsel. GREEN ENVIRONMENTAL: Unsecureds Unimpaired in Plan -------------------------------------------------- Green Environmental Processing, Inc., submitted a Plan of Reorganization under Chapter 11 of the Bankruptcy Code. The Plan implements a restructuring transaction, pursuant to which, all assets of the Estate will vest in the Reorganized Debtor. The Debtor says it has an ongoing business, as evidenced by its contracts with customers. The Chapter 11 Plan filed by Debtor on May 17, 2023, proposes to pay the debt of UMB Bank in full. The debt of UMB Bank totals less than $14 million. Class 3 General Unsecured Claims are unimpaired. Class 3 consists of the claims of Clifford Garrett, Donald Wood and JRC Real Estate Inc. In exchange for full and final satisfaction, settlement, and release, on the Effective Date, the claims of Clifford Garrett, Donald Woods and JRC Real Estate will be completed. Attorney for the Debtor: Preeti (Nita) Gupta, Esq. 2680 East Main Street, Suite 322 Plainfield, IN 46168 Tel: (317) 900-9737 Fax: (888) 261-6090 E-mail: nita07@att.net A copy of the Disclosure Statement dated May 17, 2023, is available at bit.ly/3pZbOYT from PacerMonitor.com. Green Environmental Processing Green Environmental Processing, Inc., is a manufacturer of rubber product in Newton, Ind. Green Environmental Processing filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ind. Case No. 23-00558) on Feb. 17, 2023, with $100 million to $500 million in assets and $10 million to $50 million in liabilities. Clifford Garrett, president of Green Environmental Processing, signed the petition. Judge James M. Carr oversees the case. Preeti Gupta, Esq., at the Law Office of Nita Gupta and Klemme & Co., PC serve as the Debtor's legal counsel and accountant, respectively. HANNON ARMSTRONG: Fitch Alters Outlook on 'BB+' IDR to Positive --------------------------------------------------------------- Fitch Ratings has affirmed Hannon Armstrong Sustainable Infrastructure Capital's (Hannon) and its indirect subsidiaries' Long-Term Issuer Default Ratings (IDRs) at 'BB+'. Fitch has also affirmed Hannon's senior secured revolving recourse credit facility at 'BBB-' and its unsecured debt at 'BB+'. The Rating Outlook has been revised to Positive from Stable. KEY RATING DRIVERS The Positive Outlook reflects a sustained improvement in Hannon's funding flexibility, with unsecured debt representing 85% of total debt at 1Q23 and the continuation of strong asset quality and consistent operating performance, despite the more challenging macroeconomic backdrop. Fitch believes maintenance of the firm's market position, given increased interest and competition in the renewable energy space, with enhanced scale and profitable growth and the maintenance of leverage within the firm's targeted range could lead to a ratings upgrade. The rating affirmations reflect Hannon's established, albeit niche, market position within the renewable energy financing sector, diversified investment portfolio with a strong credit track record, diverse funding and improved liquidity profile, and an experienced management team. The affirmation also reflects the company's leverage targets that are commensurate with the portfolio's risk and demonstrated access to public equity and debt markets. Rating constraints include Hannon's still modest scale and presence within the larger renewable financing markets, need for continued access to the capital markets to fund investment commitments and portfolio growth, and reduced ability to retain capital with current dividend obligations as a REIT. Hannon's impaired asset metrics remained relatively strong through 1Q23, despite the ongoing impact from higher inflation and the economic slowdown. The company categorized 0.2% of its total portfolio as impaired, which is in line with the average annual 0.2%-0.3% range the company has reported since 2020. Fitch believes impaired loans will remain low in the near term given the lack of at-risk loans at 1Q23. Hannon's profitability metrics continued to be relatively strong in the last year with pre-tax income, adjusted for the economic reality of equity method investment income, as a percentage of average assets at 3.1% for the trailing twelve months ended 1Q23; in-line with the four-year average of 3.1%. Hannon has benefited from the returns generated from increases in higher-yielding investments on its balance sheet, as well as fee income from increased securitization activity since 2018. While higher funding costs could be a headwind over the near-term, Fitch believes profitability metrics will remain relatively stable. Leverage, as measured by total debt-to-tangible equity, was 2.1x at 1Q23, up from 1.9x at FYE 2022 and 1.6x a year ago. Leverage ticked slightly above the company's long-term target range of 1.5x-2.0x, driven by larger projects being funded during the quarter. Fitch believes Hannon's leverage target is appropriate for the portfolio risk and ratings and expects Hannon to be within that range on a long-term basis. Hannon continues to move to a more unsecured funding mix. At 1Q23, approximately 85% of Hannon's debt was unsecured compared to 47% at FYE 2019, which Fitch believes provides enhanced funding flexibility, particularly in times of stress. As of March 31, 2023, Hannon had $404 million of non-recourse borrowings, $1.8 billion of senior unsecured notes, $383 million of unsecured term loans, and $344 million of convertible notes outstanding. Fitch believes Hannon has adequate liquidity to meet its funding obligations. At March 31, 2023, the company had $142 million in unrestricted cash, $350 million of unused capacity on its unsecured revolving credit facility, and $2 million of available capacity in its secured revolving credit facilities. Hannon's ratio of liquid assets and undrawn committed facilities to short-term funding was 2.0x at March 31, 2023, which compares favorably to other mortgage REITs. Recourse debt maturities within the next year are manageable and consist of $109 million in Hannon's secured credit facility and $144 million of convertible notes. In addition to debt, Hannon periodically raises capital through its at-the-market equity program. Hannon issued $189 million of common stock in 2022 and another $24 million in 1Q23. Fitch expects Hannon to continue to meet its funding obligations through both debt and equity offerings. The one-notch uplift to the senior secured revolving recourse credit facility rating versus Hannon's IDR, reflects the first-priority security interest in Hannon's assets and Fitch's expectations for above-average recovery prospects under a stressed scenario. The equalization of the unsecured debt rating with Hannon's IDR reflects the funding mix and available unencumbered asset pool which suggests average recovery prospects for debtholders under a stressed scenario. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade An increase in non-accruals or impairments of equity investments and a sustained increase in leverage above the firm's targeted range. Beyond that, negative rating action could be driven by a material shift in Hannon's risk profile, including further increases in mezzanine and equity investments, material deterioration in operating performance, including a decline in the securitization business, weaker funding flexibility including a decline in the proportion of unsecured funding below 40%, and/or weaker core earnings coverage of dividends. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Maintenance of the firm's market position in a more competitive environment, enhanced scale and, profitable growth, maintenance of the strong portfolio credit trends, adequate liquidity resources to cover funding needs and maturities for at least 12 months with extended funding durations, maintenance of leverage within the target range of 1.5x-2.0x and no material change in the current risk profile of the portfolio. DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS The secured and unsecured debt ratings are linked to the Long-Term IDR and would be expected to move in tandem. However, a meaningful decline in the amount of unsecured debt in the capital structure, in favor of secured borrowings, and/or a meaningful decline in unencumbered assets could result in downward notching for the unsecured debt rating. SUBSIDIARY AND AFFILIATE RATINGS: RATING SENSITIVITIES The ratings assigned to HAT Holdings I LLC's and HAT Holdings II LLC's are linked to Hannon's and would be expected to move in tandem. ESG CONSIDERATIONS Hannon has an ESG Relevance Score of '4' [+] for Exposure to Social Impacts as the shift in consumer awareness and preferences toward renewable energy and ESG aspects benefits the company's business model and its earnings and profitability, which has a positive impact on the credit profile, and is relevant to the ratings in conjunction with other factors. Hannon has an ESG Relevance Score of '4' for Exposure to Environmental Impacts as the company is exposed to extreme weather events on some of its assets and operations and any hedges or other offsets are usually imperfect in nature, which has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Entity/Debt Rating Prior ----------- ------ ----- Hannon Armstrong Sustainable Infrastructure Capital, Inc. LT IDR BB+ Affirmed BB+ senior unsecured LT BB+ Affirmed BB+ senior secured LT BBB- Affirmed BBB- HAT Holdings I LLC LT IDR BB+ Affirmed BB+ senior unsecured LT BB+ Affirmed BB+ HAT Holdings II LLC LT IDR BB+ Affirmed BB+ senior unsecured LT BB+ Affirmed BB+ HARSCO CORP: Egan-Jones Retains BB- Senior Unsecured Ratings ------------------------------------------------------------ Egan-Jones Ratings Company on May 8, 2023, maintained its 'BB-' foreign currency and local currency senior unsecured ratings on debt issued by Harsco Corporation. Headquartered in Philadelphia, Pennsylvania, Harsco Corporation is an industrial services and engineered products company. HAWAIIAN HOLDINGS: Egan-Jones Retains CCC- Sr. Unsecured Ratings ---------------------------------------------------------------- Egan-Jones Ratings Company on May 8, 2023, maintained its 'CCC-' foreign currency and local currency senior unsecured ratings on debt issued by Hawaiian Holdings, Inc. EJR also withdrew its 'C' rating on commercial paper issued by the Company. Headquartered in Honolulu, Hawaii, Hawaiian Holdings, Inc. provides transportation services. HAYWARD HOLDINGS: Case Summary & Two Unsecured Creditors -------------------------------------------------------- Debtor: Hayward Holdings Hayward Holdings, Inc. 2202 s. Figueroa St., #214 Los Angeles, CA 90007 Business Description: Hayward Holdings is a real estate lessor. Chapter 11 Petition Date: May 26, 2023 Court: United States Bankruptcy Court Central District of California Case No.: 23-13239 Judge: Hon. Sandra R. Klein Debtor's Counsel: Matthew Abbasi, Esq. ABBASI LAW CORPORATION 6320 Canoga Ave., Suite 220 Woodland Hills, CA 91367 Tel: 310-358-9341 Email: matthew@malawgroup.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Ali Kobaissi as president. A copy of the Debtor's list of two unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/PGAMEDY/Hayward_Holdings_Hayward_Holdings__cacbke-23-13239__0010.0.pdf?mcid=tGE4TAMA A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/CCKAUEA/Hayward_Holdings_Hayward_Holdings__cacbke-23-13239__0001.0.pdf?mcid=tGE4TAMA HAYWARD INDUSTRIES: S&P Alters Outlook to Neg., Affirms 'BB' ICR ---------------------------------------------------------------- S&P Global Ratings affirmed all of its ratings, including its 'BB' issuer credit rating, and revised its outlook to negative from stable on U.S.-based swimming pool equipment manufacturer Hayward Holdings Inc. The negative outlook reflects the potential for a downgrade over the next 12 months if the company underperforms S&P's expectations due to further weakening of consumer demand or worsening channel destocking such that leverage is sustained above 4x. The revised outlook reflects the company's heightened leverage and the risk that pool equipment demand further weakens from S&P's current expectations. Hayward's operating results for the first quarter ended April 1, 2023, were weak. Its revenue and EBITDA significantly declined due to an industrywide slowdown and a return to historical seasonal patterns, which includes a weak first quarter when pool usage is low. The company's operating performance started to slow down in the second half of 2022 with year-over-year revenue declines of 28%, which accelerated to 49% in the first quarter of 2023. The large decline was due to channel inventory destocking and weakening consumer demand as pool use fell in part because of less at-home leisure activity. Therefore, its S&P Global Ratings-adjusted debt to EBITDA significantly increased to 4.4x for the trailing 12 months ended April 1, 2023, from 3.2x as of Dec. 31, 2022, and from 2.6 for the 12 months ended March 21, 2022. If these trends continue over the next several quarters, leverage could remain above 4x into fiscal 2024, which could result in a downgrade. S&P said, "We believe the worst of the channel destocking is behind the industry and expect Hayward's revenue to moderately decline in the second quarter before returning to growth in the second half of 2023. "While we continue to believe that new pool sales will be weak through 2023 and into 2024, 80% of Hayward's revenue is tied to aftermarket upkeep orders. Hayward is therefore a relatively resilient business as compared with companies with a heavier exposure to pool installations, which are more discretionary and cyclical. Moreover, maintenance demand for pool equipment is less discretionary and decommissioning pools is costly, which incentivizes consumers to pay to maintain their existing pools. In addition, Hayward also has a track record of consistently implementing industry-standard, low- to mid-single-digit percent price increases given its leadership position, further supporting organic growth. We also forecast S&P adjusted EBITDA margins to improve sequentially and remain flat at 27.6% by the end of 2023, similar to 2022 levels, as price increases, easing cost inflation in both commodities and freight, and effective cost management largely offset the volume declines. While we expect this outlook to enable the company to reduce leverage back to expectations, we have yet to see these operating trends materialize and therefore believe there is material downside risk to our operating outlook." Hayward generates healthy free operating cash flow (FOCF) with material year-end cash balances, which currently do not benefit leverage given the still sizeable (albeit declining) financial-sponsor equity stake in the company. S&P said, "We forecast Hayward's FOCF will improve to about $150 million in 2023 due to lower inventory, as it has right sized its production to match declining demand. As such, we project cash balances of about $110 million at fiscal year-end 2023. However, due to Hayward's financial-sponsor ownership stake of more than 40% of the company's common equity, S&P Global Ratings-adjusted leverage does not net debt for the company's sizable fiscal year-end cash balances. To the extent the company's financial sponsor shareholders continue to sell down their stakes (currently at 44% in aggregate as of May 2023 compared with 65% at the end of 2022), we would no longer factor financial-sponsor ownership in our financial policy assessment, which would result in the netting of the company's available cash in our leverage calculation. This could support an outlook revision to stable, particularly given management's stated leverage target of below 3x. However, a rebound in demand and a reversal of the destocking in the distribution channel has yet to take hold, so downside rating risk remains more pronounced over the next few quarters. "The negative outlook reflects the potential for a downgrade over the next 12 months if the company underperforms our expectations due to further weakening of consumer demand or worsening channel destocking such that it sustains leverage above 4x beyond fiscal 2023." S&P could lower its rating on Hayward if it expects it to sustain S&P Global Ratings-adjusted leverage above 4x. This could occur if: -- Consumer demand for pool equipment and channel inventory destocking continues because of a weakening economic environment, keeping revenue from rebounding by the second half of 2023; -- The company does not effectively manage costs and working capital to maintain operating margins and improve cash flow generation closer to historical levels; or -- Management prioritizes acquisitions or shareholder returns over debt reduction before its EBITDA rebounds. S&P could revise its outlook on Hayward to stable if pool demand stabilizes, enabling it to generate healthy levels of FOCF, and leverage decreases to and is sustained below 4x. This could occur if: -- Pool equipment demand stabilizes and inventory destocking abates; and -- The company maintains a prudent capital allocation policy by not pursing shareholder returns or mergers and acquisitions until it stabilizes its operations such that leverage returns closer to its stated targets. ESG credit indicators: E-2; S-2; G-2 HOLDINGS MANAGEMENT: Taps Saxton & Stump as Special Counsel ----------------------------------------------------------- Holdings Management Co. seeks approval from the U.S. Bankruptcy Court for the District of Maryland to employ Saxton & Stump as special litigation counsel. The Debtor needs the firm's legal assistance to pursue claims against Grunley Construction regarding a construction project in Virginia and against a general contractor of a local state college regarding a construction project in Maryland. The firm will be paid an hourly fee of $315 and a retainer of $15,000. Jeffrey Bright, Esq., a partner at Saxton & Stump, disclosed in a court filing that his firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached at: Jeffrey C. Bright, Esq. Saxton & Stump 280 Granite Run Drive, Suite 300 Lancaster, PA 17601 Tel: (717) 556-1075 Email: jcb@saxtonstump.com About Holdings Management Co. Holdings Management Company is a Maryland corporation and commercial manufacturer of custom architectural millwork packages and acoustic building materials. The company was founded in 2019 to play an active role in the next era of manufacturing innovation, growth, and development. As a 100% woman-owned, small business, Holdings Management is contracted by large and mid-size construction managers, general contractors, product designers, architects, procurement managers, supply chain buyers, origin manufacturers, resellers, and wholesalers. Holdings Management sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Md. Case No. 23-11233) on February 24, 2023, with up to $10 million in assets and up to $10 million in liabilities. Kara Anne DiPietro, president of Holdings Management, signed the petition. Judge Nancy V. Alquist oversees the case. The Debtor tapped Joseph M. Selba, Esq., at Tydings & Rosenberg, LLP as bankruptcy counsel and Saxton & Stump as special litigation counsel. HOUSTON AMERICAN: Incurs $104K Net Income in First Quarter ---------------------------------------------------------- Houston American Energy Corp. has filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing net income of $104,175 on $230,024 of oil and gas revenue for the three months ended March 31, 2023, compared to a net loss of $165,560 on $423,820 of oil and gas revenue for the three months ended March 31, 2022. As of March 31, 2023, the Company had $12.81 million in total assets, $401,683 in total liabilities, and $12.41 million in total shareholders' equity. The Company has incurred continuing losses since 2011, with an accumulated deficit of $73.7 million as of March 31, 2023. The Company believes that it has the ability to fund, from cash on hand, its operating costs and anticipated drilling operations for at least the next twelve months following the issuance of these financial statements. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1156041/000149315223017395/form10-q.htm About Houston American Based in Houston, Texas, Houston American Energy Corp. is an independent oil and gas company focused on the development, exploration, exploitation, acquisition, and production of natural gas and crude oil properties. The Company's principal properties, and operations are in the U.S. Permian Basin. Additionally, it has properties in the U.S. Gulf Coast region, particularly Texas and Louisiana, and in the South American country of Colombia. Houston American reported a net loss of $744,279 in 2022, a net loss of $1.02 million in 2021, a net loss of $4.04 million in 2020, and a net loss of $2.51 million in 2019. As of Sept. 30, 2022, the Company had $10.35 million in total assets, $385,410 in total liabilities, and $9.96 million in total shareholders' equity. * * * This concludes the Troubled Company Reporter's coverage of Houston American Energy until facts and circumstances, if any, emerge that demonstrate financial or operational strain or difficulty at a level sufficient to warrant renewed coverage. IEH AUTO PARTS: Auto Plus Sale Okayed After First Bid Disqualified ------------------------------------------------------------------ Jonathan Randles of Bloomberg Law reports that Carl Icahn's after-market auto parts chain Auto Plus won bankruptcy court approval to sell most of its locations to Factory Motor Parts Co. after the bankrupt company disqualified a different bid under suspicion of impropriety. The previous bid was disqualified because an Auto Plus employee is suspected of feeding information to joint bidders Fisher Auto Parts Inc. and Parts Authority that other firms didn't get, Auto Plus lawyer Genevieve Graham said during a hearing. That employee is soon to be terminated, Graham said. About IEH Auto Parts Holding IEH Auto Parts Holding LLC -- https://autoplusap.com/ -- distributes automotive products. The Company offers equipment, tools, accessories, paint, and related products in the automotive aftermarket. Auto Plus serves customers in the United States. IEH Auto Parts Holding LLC and its affiliates filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-90054) on Feb. 1, 2023. In the petition filed by John Michael Neyrey, as chief executive officer, the Debtor reported assets and liabilities between $100 million and $500 million. The case is overseen by Honorable Bankruptcy Judge Christopher M Lopez. The Debtor is represented by: Veronica Ann Polnick, Esq. Jackson Walker, LLP 112 Townpark Drive NW Suite 300 Kennesaw, GA 30144 INCORA: Prepares for Bankruptcy Amid Missed Interest Payments ------------------------------------------------------------- Andrew Scurria and Alexander Gladstone of The Wall Street Journal reports that Incora, a distributor of airplane parts owned by Platinum Equity, is preparing to file for bankruptcy within weeks, after missing interest payments and facing creditor lawsuits, according to people familiar with the matter. The Fort Worth, Texas-based company is seeking financing to fund a chapter 11 restructuring, the people said. Incora is in talks with lenders in an effort to enter bankruptcy with a negotiated restructuring agreement, they said. About Incora Incora is a Fort Worth, Texas-based distributor of airplane parts. The company is controlled by Platinum Equity. On the Web: http://www.incora.com/ INDEPENDENT PET: Unsecureds Will Get 11.4% of Claims in Plan ------------------------------------------------------------ Independent Pet Partners Holdings, LLC, et al., and the Official Committee of Unsecured Creditors submitted a Combined Disclosure Statement and Chapter 11 Plan of Liquidation dated May 21, 2023. The Debtors are affiliated entities. IPP was organized in Delaware in 2017 to meet the burgeoning demand for pet services. The Debtors' initial business model involved acquiring regional, market-leading pet stores and consolidating them into a single platform. Following extensive discussions and negotiations between the Debtors, the Lender Group, and their respective advisors, the Lender Group offered to credit bid $60,000,000 of debt and serve as the Stalking Horse Bidder for the purchase of the Go-Forward Business as part of a sale process under section 363 of the Bankruptcy Code. More specifically, the Lender Group offered to purchase the assets comprising 66 of the Debtors' core, high-performing stores in Colorado, Illinois, Kansas, Minnesota and Wisconsin as a going concern. The Debtors, in their business judgment, after consulting with their advisors, made the difficult decision to close down and liquidate their remaining 93 stores, reducing the Debtors' footprint from 13 to 5 states, the result of which was the discontinuance of the Debtors' Natural Pawz and Loyal Companion banners. As a result of intense negotiations between the Settlement Parties and as a reflection of the Settlement Parties' collective business judgment, on March 17, 2023, the Settlement Parties entered into the Settlement Agreement, which provided for, among other things: (a) the global resolution all claims and disputes among the Settlement Parties; (b) the waiver and extinguishment of unsecured claims of the Lender Group and TPG, including the Deficiency Claim, thereby increasing distributions to the remaining general unsecured creditors; (c) the termination of the Challenge Period as contemplated by and defined in the Final DIP Order with the Committee's consent; (d) the filing of this Combined Disclosure Statement and Plan, which will provide for the creation of a liquidating trust charged with the orderly wind-down of the Debtors' estates, payment of Allowed Administrative Claims, Priority Non-Tax Claims, and Priority Tax Claims, and Pro Rata Distributions to Holders of General Unsecured Claims; (e) the Committee's support of the Sale, including the sale of claims against TPG, to the Stalking Horse Purchaser, and the Combined Disclosure Statement and Plan with the releases described herein; and (f) following the closing of the Sale, the Debtors' payment of Allowed unpaid Claims under section 503(b)(9) of the Bankruptcy Code in the amount of up to $612,000 and Allowed unpaid Secured Claims or Priority Tax Claims in the amount of up to $110,000. The Combined Disclosure Statement and Plan is a liquidating chapter 11 plan. The Combined Disclosure Statement and Plan is premised upon maximizing the liquidation value of the Assets to benefit creditors. Specifically, the Combined Disclosure Statement and Plan provides for the creation of the trust for the benefit of creditors (i.e., the Trust), which will be funded with the Wind Down Amount. On the Effective Date, as further described herein, the Trust will also receive a 40% recovery of the amount of any employee tax credit (the "Tax Credit") to which the Estates are entitled, net of reasonable and documented fees and expenses necessary to monetize the Tax Credit ("Net Recovery"), with the remaining 60% of the Net Recovery to be provided to the Lender Group in accordance with the Settlement Agreement. The Trustee for the Trust will be selected by the Committee and will be fully responsible for the process of reconciling Claims and the Distributions to be made under the Combined Disclosure Statement and Plan. Class 3 consists of General Unsecured Claims. Each Holder of an Allowed General Unsecured Claim shall receive, in full satisfaction and in exchange for such Allowed General Unsecured Claim, a Trust Interest, which shall entitle each Holder thereof to its Pro Rata share of Trust Assets after satisfaction in full of Allowed Administrative Claims, Allowed Other Secured Claims, Allowed Priority Tax Claims, Allowed Priority Non-Tax Claims, and payment of, or provision for, all Trust Expenses. Holders of Secured Credit Facilities shall not receive any Distributions from Allowed General Unsecured Claims on account of the Deficiency Claims or on account of such Secured Credit Facilities. Upon the Effective Date, TPG will waive all amounts of its General Unsecured Claim against the Estates under its management services agreement. The allowed unsecured claims total $10,663,000. This Class will receive a distribution of 11.4% of their allowed claims. Class 3 is Impaired under the Combined Disclosure Statement and Plan. Class 5 consists of all Interests. In full and final satisfaction of each Allowed Interest, each Allowed Interest shall be canceled, released, and extinguished, and will be of no further force or effect, and no Holder of Allowed Interests shall be entitled to any recovery or Distribution under the Combined Disclosure Statement and Plan on account of such Interests. This Combined Disclosure Statement and Plan provides for the creation of the Trust for the benefit of Holders of Allowed General Unsecured Claims. On the Effective Date, the (a) Wind-Down Amount and (b) the Retained Causes of Action will be transferred to the Trust for the benefit of Holders of General Unsecured Allowed Claims. Also on the Effective Date, the Estates' right, title, and interest to the Tax Credits and the proceeds of the Tax Credits will be transferred to the Trust; provided, that, upon receipt by the Trust of any Net Recovery on account of the Tax Credits, the Trust shall pay 60% of the Net Recovery to members of the Lender Group in accordance with the Settlement Agreement and Article 10.3(b). A copy of the Disclosure Statement dated May 21, 2023, is available at https://urlcurt.com/u?l=cSR3J0 from Omniagentsolutions, the claims agent. Counsel to the Debtors: Andrew L. Magaziner, Esq. S. Alexander Faris, Esq. Kristin L. McElroy, Esq. YOUNG CONAWAY STARGATT & TAYLOR, LLP Rodney Square, 1000 North King Street Wilmington, DE 19801 Telephone: (302) 571-6600 Facsimile: (302) 571-1253 E-mail: amagaziner@ycst.com afaris@ycst.com kmcelroy@ycst.com - and - David A. Agay, Esq. Marc Carmel, Esq. Joshua Gadharf, Esq. Maria G. Carr, Esq. Ashley Jericho, Esq. MCDONALD HOPKINS LLC 300 North LaSalle Street, Suite 1400 Chicago, IL 60654 Telephone: (312) 280-0111 Facsimile: (312) 280-8232 E-mail: dagay@mcdonaldhopkins.com mcarmel@mcdonaldhopkins.com jgadharf@mcdonaldhopkins.com mcarr@mcdonaldhopkins.com ajericho@mcdonaldhopkins.com Counsel for the Official Committee of Unsecured Creditors: Christopher M. Samis, Esq. Aaron H. Stulman, Esq. Elizabeth R. Schlecker, Esq. POTTER ANDERSON & CORROON LLP 1313 North Market Street, 6th Floor Wilmington, DE 19801 Telephone: (302) 984-6000 E-mail: csasmis@potteranderson.com astulman@potteranderson.com eschlecker@potteranderson.com - and - James S. Carr, Esq. Maeghan J. McLoughlin, Esq. Ravi Vohra, Esq. KELLEY DRYE & WARREN LLP 3 World Trade Center 175 Greenwich Street New York, NY 10007 Telephone: (212) 808-7800 E-mail: jcarr@kelleydrye.com mmcloughlin@kelleydrye.com rvohra@kelleydrye.com About Independent Pet Partners Independent Pet Partners Holdings, LLC and various affiliated entities sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10153) on February 5, 2023. In the petition signed by Stephen Coulombe, co-chief restructuring officer, the Debtor disclosed up to $500 million in both assets and liabilities. Independent Pet Partners offers a one-stop pet experience with healthy, high-quality food products and treats and a range of pet services, including grooming, self-wash, pet parent education, and veterinary services. The Debtors also sell goods through their e-commerce platform with each of the Debtors' banners having its own standalone website. As of the Petition Date, the Debtors operated under four unique regional banners: Chuck and Don's, Kriser's Natural Pet, Loyal Companion, and Natural Pawz. Judge Laurie Selber Silverstein oversees the case. The Debtors tapped McDonald Hopkins, LLC as general counsel, Young Conaway Stargatt and Taylor, LLP as co-counsel, Berkeley Research Group, LLC as co-chief restructuring officer, Houlihan Lokey Capital, Inc. as financial advisor and investment banker, and Omni Agent Solutions as notice, claims, and balloting agent. CION Investment Corporation; Main Street Capital Corporation; MCS Income Fund, Inc.; Newstone Capital Partners III, L.P; Newstone Capital Partners III-A, L.P.; and Newstone Capital Partners III-B, L.P., as DIP Lenders and Prepetition Lenders, are represented by Dechert LLP. Co-counsel to the DIP Lenders and Prepetition Lenders is Richards, Layton & Finger, P.A. Acquiom Agency Services, LLC, as administrative and collateral agent under the DIP facility and as Prepetition ABL Agent, and Prepetition Priming Agent, is represented by Paul Hastings, LLP. Wilmington Trust, National Association, as Prepetition DDTL Agent, is represented by Arnold & Porter Kaye Scholer LLP. INITALY LLC: Case Summary & Eight Unsecured Creditors ----------------------------------------------------- Debtor: Initaly LLC 103 E State Street Pendleton IN 46064 Business Description: Initaly LLC is an owner and operator of an Italian restaurant. Chapter 11 Petition Date: May 26, 2023 Court: United States Bankruptcy Court Southern District of Indiana Case No.: 23-02259 Judge: Hon. Robyn L. Moberly Debtor's Counsel: Jeffrey Hester, Esq. HESTER BAKER KREBS LLC One Indiana Sq Suite 1330 Indianapolis IN 46204 Tel: 317-833-3030 Email: jhester@hbkfirm.com Total Assets: $157,552 Total Liabilities: $1,206,156 The petition was signed by Catello Avagnale as member. A full-text copy of the petition containing, among other items, a list of the Debtor's eight unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/U2JFZUA/Initaly_LLC__insbke-23-02259__0001.0.pdf?mcid=tGE4TAMA INNOVATION PHARMACEUTICALS: Incurs $698K Net Loss in Third Quarter ------------------------------------------------------------------ Innovation Pharmaceuticals Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $698,000 on $0 of revenues for the three months ended March 31, 2023, compared to a net loss of $1.48 million on $0 of revenues for the three months ended March 31, 2022. For the nine months ended March 31, 2023, the Company reported a net loss of $2.49 million on $0 of revenues compared to a net loss of $5.41 million on $0 of revenues for the nine months ended March 31, 2022. As of March 31, 2023, the Company had $7.99 million in total assets, $5.28 million in total liabilities, and $2.72 million in total stockholders' equity. For the nine months ended March 31, 2023, the Company had negative cash flow from operations of $1.7 million. As of March 31, 2023, the Company has negative working capital of $2.9 million. As of March 31, 2023, the Company's cash amounted to $1.9 million and current liabilities amounted to $4.8 million. Innovation said, "The Company has expended substantial funds on its clinical trials and expects to continue our spending on research and development expenditures. We expect to incur further losses in the development of our business and have been dependent on funding operations from inception. These conditions raise substantial doubt about our ability to continue as a going concern. Management's plans include continuing to finance operations through the private or public placement of debt and/or equity securities and the reduction of expenditures. However, no assurance can be given at this time as to whether we will be able to achieve these objectives." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1355250/000147793223003414/ipix_10q.htm About Innovation Pharmaceuticals Innovation Pharmaceuticals Inc. (IPIX) -- http://www.IPharmInc.com -- is a clinical stage biopharmaceutical company developing a portfolio of innovative therapies addressing multiple areas of unmet medical need, including inflammatory diseases, cancer, infectious disease, and dermatologic diseases. Innovation Pharmaceuticals reported a net loss of $7.04 million for the year ended June 30, 2022, compared to a net loss of $13.87 million for the year ended June 30, 2021. As of Sept. 30, 2022, the Company had $9.34 million in total assets, $5.92 million in total liabilities, and $3.42 million in total stockholders' equity. Farmington, Utah-based Pinnacle Accountancy Group of Utah (a dba of Heaton & Company, PLLC), the Company's auditor since 2018, issued a "going concern" qualification in its report dated Sept. 28, 2022, citing that the Company has negative working capital, has suffered losses and negative cash flow from operations, which raise substantial doubt about its ability to continue as a going concern. INTEGRATED VENTURES: Incurs $1.8 Million Net Loss in Third Quarter ------------------------------------------------------------------ Integrated Ventures, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $1.77 million on $1.44 million of net total revenues for the three months ended March 31, 2023, compared to a net loss of $74,005 on $1.43 million of net total revenue for the three months ended March 31, 2022. For the nine months ended March 31, 2023, the Company reported a net loss of $3.32 million on $2.37 million of net total revenue compared to net income of $758,191 on $5.89 million of net total revenue for the nine months ended March 31, 2022. As of March 31, 2023, the Company had $14.09 million in total assets, $2.87 million in total current liabilities, $1.12 million in series C preferred stock, $3 million in series D preferred stock, and $7.09 million in total stockholders' equity. Integrated Ventures said, "Historically, the Company has reported recurring net losses from operations and used net cash in operating activities. As of March 31, 2023, the Company's current liabilities exceeded its current assets by $2,565,444 and the Company had an accumulated deficit of $50,752,955. These conditions raise substantial doubt about the Company's ability to continue as a going concern." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1520118/000147793223003578/intv_10q.htm About Integrated Ventures Inc. Integrated Ventures Inc. -- www.integratedventuresinc.com -- focuses on acquiring, launching, and operating companies in the cryptocurrency sector, mainly in digital currency mining, equipment manufacturing, and sales of branded mining rigs, as well as blockchain software development. Integrated Ventures reported a net loss of $565,514 for the year ended June 30, 2022, compared to a net loss of $22.43 million for the year ended June 30, 2021. As of Sept. 30, 2022, the Company had $15.95 million in total assets, $1.96 million in total current liabilities, $1.12 million in series C preferred stock, $3 million in series D preferred stock, and $9.86 million in total stockholders' equity. Houston, Texas-based M&K CPAS, PLLC, the Company's auditor since 2018, issued a "going concern" qualification in its report dated Sept. 27, 2022, citing that the Company has suffered net losses from operations in current and prior periods and has accumulated deficiency, which raises substantial doubt about its ability to continue as a going concern. KDP LLC: Court OKs $450,000 DIP Loan from Obra ---------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized KDP, LLC, et al. to use cash collateral and obtain postpetition financing on an interim basis. The Debtors are permitted to obtain senior secured post-petition financing from Obra Institutional Credit, LLC in an aggregate maximum principal amount of $450,000, including up to $300,000 on an interim basis, on a superpriority basis. The Debtors require access to post-petition financing in an amount necessary to fund (i) the Debtors' operations, (ii) the administrative costs of the Chapter 11 Cases, and (iii) the pursuit of a sale of substantially all their assets. These events that constitute an "Event of Default" includes: (i) The Debtors (A) fail to pay any payment (whether principal, interest, or otherwise) when such amount becomes due and payable under the DIP Term Sheet or (B) defaults in the due performance or observance of any other term, covenant, or agreement contained in the DIP Term Sheet (and, if such default is capable of being remedied, it has not been remedied within the cure period set forth in the DIP Term Sheet or, if no such cure period is provided, it has not been remedied to the reasonable satisfaction of the DIP Lender five business days following written notice to the Debtors of the occurrence of such event of default); (ii) Failure to repay the Loans within 90 days from the Petition Date; (iii) The closing of the sale of substantially all of the Debtors' assets pursuant to section 363 of the Bankruptcy Code that does not result in the repayment in full of the DIP Obligations; (iv) Any representation, warranty, or statement made by the Debtors herein or in the DIP Term Sheet or in any certificate delivered in connection with the DIP Term Sheet will prove to be untrue in any material respect on the date on which made or deemed made; (v) The security interest granted to the DIP Lender will cease to be in full force and effect, or will cease to create a perfected security interest in, and lien on, the DIP Collateral purported to be created thereby; and (vi) The DIP Term Sheet is or becomes invalid, ineffective or unenforceable against the Debtors, in whole or in part, or the Debtors so asserts or at any time denies the liability or the DIP Obligations under the DIP Term Sheet. The DIP Lender's agreement to provide the DIP Financing in accordance with the DIP Documents and the Debtors' authorization to use Post-Petition Cash Collateral will immediately and automatically terminate upon the earliest to occur of any of the following: (i) August 20, 2023; (ii) The date of final indefeasible payment and satisfaction in full in cash of the DIP Obligations; (iii) The entry of an order by the Court granting a motion by the Debtors to obtain additional financing from a party other than DIP Lender unless the proceeds from such financing are used to immediately repay in cash the DIP Obligations or unless such financing is subordinate to the DIP Obligations and consented to in writing by the DIP Lender (which consent may be withheld in its reasonable discretion); (iv) The closing of the sale of substantially all of the Debtors' assets; (v) The dismissal of any of the Chapter 11 Cases or the conversion of any of the Chapter 11 Cases to a case under chapter 7 or a conversion of any of the Chapter 11 Cases from a case under subchapter V of chapter 11 of the Bankruptcy Code; (vi) Any DIP Order is stayed, reversed, vacated, amended or otherwise modified in any respect without the prior written consent of the DIP Lender (which consent may be withheld in its reasonable discretion); or (vii) Upon entry of an order of the Court finding an Event of Default or following the passage of the Default Notice Period with no action by any of the Debtors, the SubChapter V Trustee, or the U.S. Trustee. Pursuant to 11 U.S.C. section 364(c)(1), all of the DIP Obligations will constitute allowed senior administrative expense claims against the Debtors with priority over any and all administrative expenses, adequate protection claims, diminution claims and all other claims against the Debtors' estate, now existing or hereafter arising, of any kind whatsoever. The Debtors are directed to maintain insurance on all insurable DIP Collateral against such risks and to the extent customary in its industry. As adequate protection, the DIP lender is granted a valid, binding, continuing, enforceable fully perfected first priority senior security interest in and lien upon all real and personal property of the Debtors that was unencumbered as of the Petition Date. The DIP Liens will not be subject or subordinate to (i) any lien or security interest that is avoided and preserved for the benefit of the Debtors' estate under 11 U.S.C. section 551, (ii) any liens arising after the Petition Date including, without limitation, any liens or security interests granted in favor of any federal, state, municipal or other governmental unit, commission, board or court for any liability of the Debtors to the extent permitted by applicable non-bankruptcy law, or (iii) any intercompany or affiliate liens of the Debtors. The Debtors will maintain insurance on all insurable DIP Collateral against such risks and to the extent customary in its industry. A final hearing on the matter is set for June 22, 2023 at 10 a.m. A copy of the order is available at https://urlcurt.com/u?l=LifbEj from PacerMonitor.com. About KDP, LLC KDP, LLC is an investment adviser registered with the SEC specializing in the management of high yield bonds and leveraged loans with a strong focus on rigorous, bottom-up credit analysis. The Debtors sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10662) on May 21, 2023. In the petition signed by Kingman D. Penniman, president and chief executive officer, the Debtor disclosed up to $10 million in both assets and liabilities. Judge J. Kate Stickles oversees the case. David Klauder, Esq., and Melissa M. Hartlipp, Esq., at Bielli and Klauder, LLC, represent the Debtor as legal counsel. Obra Institutional Credit, LLC, as lender, is represented by: R. Stephen McNeill, Esq. Potter Anderson & Corroon LLP 1313 North Market Street, 6th Floor Wilmington, DE 19801 Email: rmcneill@potteranderson.com KEITH STRANGE: Court OKs Interim Cash Collateral Access ------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Arkansas, Central Division, authorized Keith Strange LLC to use cash collateral on an interim basis in accordance with the budget. The Debtor requires the use of cash collateral to meet its working capital and business operation needs so it may continue to operate. On November 14, 2016, for value received, the Debtor executed and delivered to Bayfirst a Note and Security Agreement whereby the Debtor granted Bayfirst a security interest in and to, inter alia, all of the Debtor's accounts and accounts receivable. On November 4, 2016, Bayfirst filed a UCC Financing Statement to perfect its security interest in and to the Collateral, and on September 15, 2021, Bayfirst filed a UCC Financing Statement Amendment for the purpose of continuing its original UCC Financing Statement. The Debtor will provide Bayfirst adequate protection in the form of: (i) a lump sum payment of $12,718 within five business days of entry of the Order; and (ii) ongoing monthly payments in the amount of $3,101 to be paid on the 1st day of each month until the earliest of the entry of final order on the Motion, confirmation of a proposed plan of reorganization or liquidation, conversion of the case to a case under Chapter 7, or dismissal of the case; provided, however, all payments made by the Debtor to Bayfirst will be applied towards the reduction of Bayfirst's claim against the Debtor. A copy of the order is available at https://urlcurt.com/u?l=jBXJ9J from PacerMonitor.com. About Keith Strange LLC Keith Strange LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Ark. Case No. 23-10357) on February 9, 2023. In the petition signed by Keith Strange, manager, the Debtor disclosed up to $50,000 in assets and up to $1 million in liabilities. Judge Richard D. Taylor oversees the case. Frank H. Falkner, Esq., at Dilks Law Firm, represents the Debtor as legal counsel. KIDDE-FENWAL: Removed from AFFF Case After Chapter 11 Filing ------------------------------------------------------------ Pat Rizzuto of Bloomberg Law reports that liability claims against a company that used to produce PFAS-based firefighting foams won't be part of a bellwether case coming to trial next month, because the company has filed for bankruptcy, according to a federal judge's recent order. Judge Richard M. Gergel, who's overseeing a multidistrict case involving thousands of lawsuits, severed foam manufacturer Kidde-Fenwal Inc. (KFI) on Tuesday from the June 5 trial in the US District Court for the District of South Carolina because the company filed for bankruptcy on May 14, 2023. About Kidde-Fenwal Kidde-Fenwal Inc. -- https://www.kidde-fenwal.com/ -- manufactures fire protection systems. The Company offers products such as fire control systems, explosion aircraft protection, laser-based smoke detection devices, electronic gas ignitions, and fire suppressions. Kidde-Fenwal markets its products to mining, manufacturing, education, and commercial sectors. Kidde-Fenwal Inc. sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 23-10638) on May 14, 2023. In the petition filed by James Mesterharm, as chief transformation officer, the Debtor reported assets between $100 million and $500 million and estimated liabilities between $1 billion and $10 billion. SULLIVAN & CROMWELL LLP and MORRIS NICHOLS ARSHT & TUNNELL LLP are the Debtor's counsel. STRETTO is the claims agent. LANDAMERICA FINANCIAL: Revived Bankruptcy Case Nears End -------------------------------------------------------- Michael Schwartz of Richmond BizSense reports that a select few creditors of the LandAmerica Financial Group bankruptcy estate are getting a little extra recompense. The money comes eight years after the case was brought to a seemingly successful conclusion, only to be revived because of the former trustee's theft of millions of dollars. Checks were mailed out this month to disburse the last of the funds from a wind-down account that dates to the original closure of the LFG case in 2015. Those funds, just shy of $3 million, were to be held until the expiration of the original wind-down period in 2021. But in 2019, that account was found to have been emptied. Bruce Matson, the veteran Richmond attorney and longtime bankruptcy trustee who oversaw the complicated LFG case, was found to be the culprit of the missing funds. Matson fessed up to the crime only after the money was discovered missing during the course of the separate bankruptcy case of his longtime law firm, LeClairRyan. He paid the money back in full to the LFG estate but still was charged and convicted of the theft and sentenced in November 2021 to 44 months in federal prison. A substitute trustee, veteran Richmond attorney Ben Ackerly, was brought in to unwind Matson's doings and last month told the bankruptcy court it's time to finally put the case to rest once again -- this time for good. U.S. Bankruptcy Judge Kevin Huennekens, who has presided over the LFG case since the once mighty Henrico-based title insurance company collapsed in 2008, approved the disbursement process April 24, 2023. Ackerly's camp began sending out checks May 8, divvying up $2.42 million in remaining wind-down funds repaid by Matson. A group of 26 of the company's largest creditors are to receive checks of varying amounts but no less than $2,500 each. That total will spend down 97 percent of the leftover funds. The remainder will go to 154 other creditors. Those creditors all last received a check from the estate in 2015. Ackerly's camp also set aside $145,000 for its own wind-down budget, mainly to pay financial and tax advisers, and legal and other expenses. Ackerly, through attorney Tyler Brown of Hunton Andrews Kurth, declined to comment for this story. The final step in the process once the checks are all out is to file final tax returns for the estate and close the case with as close to a zero balance as possible. Any leftover funds would be donated to a charity of the trustee's choosing. That final re-closing of the case finally would bring an end to a bankruptcy process that was hailed at the time as a success, given the money involved and the complexity of LandAmerica's operations. About LandAmerica Financial LandAmerica Financial Group, Inc., provided real estate transaction services with offices nationwide and a vast network of active agents. LandAmerica Financial Group and its affiliate LandAmerica 1031 Exchange Services Inc. filed for Chapter 11 protection (Bankr. E.D. Va. Lead Case No. 08-35994) on Nov. 26, 2008. Attorneys at Willkie Farr & Gallagher LLP and McGuireWoods LLP served as co-counsel. Zolfo Cooper served as restructuring advisor. Epiq Bankruptcy Solutions served as claims and notice agent. Attorneys at Akin Gump Strauss Hauer & Feld LLP and Tavenner & Beran PLC served as counsel to the Creditors Committee of 1031 Exchange. Bingham McCutchen LLP and LeClair Ryan served as counsel to the Creditors Committee of LFG. In its bankruptcy petition, LFG reported total assets of $3.325 billion and total debts of $2.839 billion as of Sept. 30, 2008. On March 6, 2009, March 27, 2009, March 31, 2009, July 17, 2009, Oct. 12, 2009, and Nov. 4, 2009, various LFG affiliates -- LandAmerica Assessment Corporation, LandAmerica Title Company, Southland Title Corporation, Southland Title of Orange County, Southland Title of San Diego, LandAmerica Credit Services, Inc., Capital Title Group, Inc., and LandAmerica OneStop Inc. -- also commenced voluntary Chapter 11 cases. The Chapter 11 cases of LFG, LES, and the LFG Affiliates are jointly administered under case number 08-35994. LandAmerica filed a Joint Plan of Liquidation on Sept. 9, 2009. The Court on Nov. 23, 2009, entered an order confirming the Joint Chapter 11 Plan of LFG and its Affiliated Debtors, dated Nov. 16, 2009, as to all Debtors other than OneStop. The effective date with respect to the Plan was Dec. 7, 2009. Plan trustees were appointed for LFG and LES. LEAFBUYER TECHNOLOGIES: Posts $170K Net Loss in Third Quarter ------------------------------------------------------------- Leafbuyer Technologies, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $170,458 on $1.28 million of revenue for the three months ended March 31, 2023, compared to a net loss of $271,254 on $984,010 of revenue for the three months ended March 31, 2022. For the nine months ended March 31, 2023, the Company reported a net loss of $416,320 on $3.76 million of revenue compared to net income of $1.31 million on $2.76 million of revenue for the nine months ended March 31, 2022. As of March 31, 2023, the Company had $1.93 million in total assets, $3.38 million in total liabilities, and a total stockholders' deficit of $1.45 million. Leafbuyer said, "As of March 31, 2023, we had $434,933 in cash and cash equivalents and a working capital deficit of $2,373,235. We are dependent on funds raised through equity financing. Our cumulative net loss of $24,266,809 was funded by debt and equity financing and we reported a net loss from operations of $416,322 for the nine months ended March 31, 2023. Accordingly, there is substantial doubt about our ability to continue as a going concern within one year after the date the financial statements are issued. "Our ability to continue as a going concern is dependent upon our generating profitable operations in the future or obtaining the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. Management believes that actions presently being taken to further implement our business plan of expansion of products, geographical locations we sell our services and deeper market penetration will generate additional revenues and eventually positive cash flow and provide opportunity for the Company to continue as a going concern. While we believe in the viability of our strategy to generate additional revenues and our ability to raise additional funds, there can be no assurances to that effect." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1643721/000147793223003563/lbuy_10q.htm About Leafbuyer Leafbuyer Technologies, Inc. is a marketing technology company for the cannabis industry and is an online cannabis resource. Leafbuyer reported net income of $955,695 for the year ended June 30, 2022, compared to a net loss of $5.03 million for the year ended June 30, 2021. As of Dec. 31, 2022, the Company had $1.97 million in total assets, $3.23 million in total liabilities, and a total stockholders' deficit of $1.26 million. Lakewood, Colorado-based B F Borgers CPA PC, the Company's auditor since 2017, issued a "going concern" qualification in its report dated Sept. 27, 2022, citing that the Company has suffered recurring losses from operations and has a significant accumulated deficit. In addition, the Company continues to experience negative cash flows from operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. LTL MANAGEMENT: Mesothelioma Victims Oppose J&J's Proposal ---------------------------------------------------------- Devin Golden of MesotheliomaGuide reports that victims of mesothelioma cancer and other asbestos-caused diseases have spoken out against the proposed bankruptcy settlement from Johnson & Johnson, which is in the public eye for allegedly exposing consumers to asbestos for years. Johnson & Johnson proposed an $8.9 billion settlement in hopes of completing a bankruptcy filing for its subsidiary company, LTL Mnagement, which is shouldering all legal liabilities from Johnson & Johnson's talc products, including Johnson & Johnson Baby Powder. This product is a main character in many legal claims, which allege the product's talc mixture was often contaminated with asbestos. Asbestos is the only cause of mesothelioma cancer and can cause other diseases, including ovarian cancer and lung cancer. Lawyers representing many of the tens of thousands of cancer victims with pending claims have filed a court order. They are asking the court to reject the proposed settlement. According to Reuters, the lawyers state Johnson & Johnson is attempting "the largest intentional fraudulent transfer in United States history." Reuters reports that Johnson & Johnson's subsidiary company filed for bankruptcy just a couple of hours after a court rejected the company's first bankruptcy pitch. The argument is that $8.9 billion is not enough, as it limits the legal liabilities for Johnson & Johnson and, more importantly, limits how much cancer victims can receive in deserved compensation to pay for medical bills, travel costs, funeral arrangements, lost wages, and more. Johnson & Johnson created a subsidiary company (LTL Management), which absorbed all of Johnson & Johnson's legal liabilities related to its talc Baby Powder product. The subsidiary immediately filed for bankruptcy, which is called the "Texas Two-Step" maneuver used by asbestos companies for decades to avoid multi-million-dollar lawsuits. Johnson & Johnson is the latest company to use this tactic, but it might be the most well-known company and the most public incident involving this tactic. According to Reuters, the $8.9 billion settlement includes $6.5 billion for ovarian cancer claims, $2 billion for mesothelioma lawsuits, and $400 million to resolve false marketing and consumer protection claims made by state attorneys general. Background of Johnson & Johnson Baby Powder Lawsuits This attempted settlement is due to claims of Johnson & Johnson Baby Powder causing cancer for consumers. The Baby Powder was made for decades with talc, which is a naturally occurring mineral. Talc is found in many of the same geographical locations where asbestos, another naturally occurring mineral, exists. Asbestos can cause cancer, and it is believed to contaminate talc. When talc is ground into talcum powder, which was a main ingredient in Johnson & Johnson Baby Powder, it can include sharp fragments of asbestos. Asbestos debris in talc can enter users of the Baby Powder and irritate cell linings, which can cause cancer. In May of 2020, Johnson & Johnson announced it would no longer manufacture or sell its talcum powder Baby Powder in the U.S. and Canada. The company found an alternative to talc. The company announced on August of 2022 it would end the sale of talc Baby Powder worldwide. History of Johnson & Johnson's Attempt to Settle Cancer Lawsuits Johnson & Johnson proposed the $8.9 billion settlement after its first settlement proposition was rejected in January by the 3rd U.S. Circuit Court of Appeals in Philadelphia. While many lawyers are in favor of the new settlement, a lot of mesothelioma and asbestos law firms and victims are opposed to it. They feel the settlement, which becomes similar to an asbestos trust fund, offers Johnson & Johnson a way out of paying much more money to victims who deserve fair compensation. When the settlement was reached, there were around 38,000 pending lawsuits needing to be resolved. In April 2023, Johnson & Johnson asked a judge to halt those lawsuits while the proposed settlement could be considered. The company asked for the same "stay" of legal proceedings during the first settlement attempt. According to Reuters, two groups of cancer plaintiffs and the U.S. Department of Justice's bankruptcy watchdog group have opposed the request for lawsuits to be paused. About LTL Management LTL Management, LLC, is a subsidiary of Johnson & Johnson (J&J), which was formed to manage and defend thousands of talc-related claims and oversee the operations of Royalty A&M. Royalty A&M owns a portfolio of royalty revenue streams, including royalty revenue streams based on third-party sales of LACTAID, MYLANTA/MYLICON and ROGAINE products. LTL Management filed a petition for Chapter 11 protection (Bankr. W.D.N.C. Case No. 21-30589) on Oct. 14, 2021. The case was transferred to New Jersey (Bankr. D.N.J. Case No. 21-30589) on Nov. 16, 2021. The Hon. Michael B. Kaplan is the case judge. At the time of the filing, the Debtor was estimated to have $1 billion to $10 billion in both assets and liabilities. The Debtor tapped Jones Day and Rayburn Cooper & Durham, P.A., as bankruptcy counsel; King & Spalding, LLP and Shook, Hardy & Bacon LLP as special counsel; McCarter & English, LLP as litigation consultant; Bates White, LLC as financial consultant; and AlixPartners, LLP as restructuring advisor. Epiq Corporate Restructuring, LLC, is the claims agent. An official committee of talc claimants was formed in the Debtor's Chapter 11 case on Nov. 9, 2021. On Dec. 24, 2021, the U.S. Trustee for Regions 3 and 9 reconstituted the talc claimants' committee and appointed two separate committees: (i) the official committee of talc claimants I, which represents ovarian cancer claimants, and (ii) the official committee of talc claimants II, which represents mesothelioma claimants. The official committee of talc claimants I tapped Genova Burns LLC, Brown Rudnick LLP, Otterbourg PC and Parkins Lee & Rubio LLP as its legal counsel. Meanwhile, the official committee of talc claimants II is represented by the law firms of Cooley LLP, Bailey Glasser LLP, Waldrep Wall Babcock & Bailey PLLC, Massey & Gail LLP, and Sherman Silverstein Kohl Rose & Podolsky P.A. Re-Filing of Chapter 11 Petition On January 30, 2023, a panel of the Third Circuit issued an opinion directing this Court to dismiss the 2021 Chapter 11 Case on the basis that it was not filed in good faith. Although the Third Circuit panel recognized that the Debtor "inherited massive liabilities" and faced "thousands" of future claims, it concluded that the Debtor was not in financial distress before the filing. On March 22, 2023, the Third Circuit entered an order denying the Debtor's petition for rehearing. The Third Circuit entered an order denying LTL's stay motion on March 31, 2023, and, on the dame day, issued its mandate directing the Bankruptcy Court to dismiss the 2021 Chapter 11 Case. The Bankruptcy Court entered an order dismissing the 2021 Case on April 4, 2023. Johnson & Johnson on April 4, 2023, announced that its subsidiary LTL Management LLC (LTL) has re-filed for voluntary Chapter 11 bankruptcy protection (Bankr. D.N.J. Case No. 23-12825) to obtain approval of a reorganization plan that will equitably and efficiently resolve all claims arising from cosmetic talc litigation against the Company and its affiliates in North America. In the new filing, J&J said it has agreed to contribute up to a present value of $8.9 billion, payable over 25 years, to resolve all the current and future talc claims, which is an increase of $6.9 billion over the $2 billion previously committed in connection with LTL's initial bankruptcy filing in October 2021. LTL also has secured commitments from over 60,000 current claimants to support a global resolution on these terms. LUCKY BUCKS: Preps Up Possible Bankruptcy Filing ------------------------------------------------ Rachel Butt of Bloomberg News reports that Georgia-based gaming operator Lucky Bucks LLC is preparing to file for bankruptcy as soon as next week, according to people with knowledge of the situation. The Trive Capital-backed company has been negotiating with its lenders and is aiming to hammer out a restructuring agreement before the potential filing, said the people, who asked not to be identified because the matter is private. It is considering options including selling its assets or handing control to its lenders in court protection, the people said. Talks aren't final and plans could change. About Lucky Bucks Lucky Bucks, LLC, is a Coin Operated Amusement Machine (COAM) operator in the state of Georgia. COAMs are placed in high traffic sites, such as convenience stores and gas stations, and provide patrons with a slot-machine type gaming experience. Reported net revenue for the 12 months ended Sept. 30, 2022, was $90 million. * * * In March 2023, Moody's Investors Service downgraded Lucky Bucks, LLC's Corporate Family Rating to Caa3 from Caa1. The company's Probability of Default Rating was downgraded to Caa3-PD from Caa1-PD and its senior secured first lien bank credit facility ratings were downgraded to Caa3 from Caa1. The rating outlook is negative. Moody's said, "The downgrade considers several factors, including the unfavorable impact on EBITDA from the increase in regulatory enforcement in the Georgia coin-operated amusement machine market, along with Moody's heightened concern regarding inflation and recession, particularly the potential impact on consumer discretionary spending. Combined, these factors have resulted in increased leverage levels and weak liquidity. Moody's believes the company is at risk of a covenant violation." LYM DEVELOPMENT: Court OKs Cash Collateral Access Thru June 14 -------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Pennsylvania authorized LYM Development, LLC to use cash collateral on an interim basis in accordance with the budget, through June 14, 2023. The Debtor requires the use of cash collateral to operate in the ordinary course of business. The Debtor was formed in Pennsylvania on December 26, 2019. Its development of the properties has been delayed and adversely affected by the long pandemic. The Debtor has one property currently generating rental income. The remaining properties are being evaluated for continued development for sale or potentially being sold as is. Despite the potential value of its assets, the Debtor has faced certain liquidity problems leading to the filing of this chapter 11 case. The Debtor's financial issues have been compounded by one of its secured lenders, ING Properties, LLC, filing a Confession of Judgment action against the Debtor in December 2022 in the amount of $2.6 million. Further, FTF Lending, LLC filed two Mortgage Foreclosure actions on May 5, 2023 against the Debtor's properties located at 1923 Gerritt St, Philadelphia, PA and 2255 Greenwich St, Philadelphia, PA. These entities assert an interest in the Debtor's cash collateral: (a) Parkside Funding Group LLC: inter alia, accounts receivable pursuant to a Merchant Cash Advance Agreement dated September 15, 2022 and UCC filed; (b) Custom Capital USA: inter alia, accounts receivable pursuant to a Merchant Cash Advance Agreement dated April 15, 2022 and UCC filed on July 13, 2022; (c) 3PCG Inc.: inter alia, accounts receivable pursuant to a Merchant Cash Advance Agreement dated July 11, 2022 and UCC filed; on October 20, 2022; (d) FTF Lending, LLC: Construction Reserve pursuant to the respective Mortgages dated in or around March 2021, June 2021 and January 2022 on the Debtor's properties located on Greenwich Street, Gerritt Street, and Cleveland Street, respectively; and (e) ING Properties, LLC: Funds available for disbursement at the sole discretion of the lender pursuant Mortgage dated November 29, 2021 on the Debtor's properties located at 901-911 Emily Street. As adequate protection for the use of cash collateral, these Entities will be granted valid, binding, enforceable and automatically perfected replacement liens on and security interests in the same types and items of the Debtor's property that the Entities held a valid, enforceable, properly perfected lien or Security Interest in prepetition. The Replacement Liens, and any other form of adequate protection provided for under the Order, will be only valid to the extent the Entities has a valid perfected lien against the cash collateral of the Debtor and the Debtor is unable to avoid such lien under Chapter 5 of the Bankruptcy Code or other applicable law. A final hearing on the matter is set for June 14, 2023 at 9:30 a.m. A copy of the motion is available at https://urlcurt.com/u?l=ignjcM from PacerMonitor.com. A copy of the order and the Debtor's budget is available at https://urlcurt.com/u?l=H80Gur from PacerMonitor.com. The Debtor project total expenses, on a weekly basis, as follows: $2,178 for Week 1; $0 for Week 2; $0 for Week 3; and $2,178 for Week 4. About LYM Development, LLC LYM Development, LLC is engaged in activities related to real estate. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Pa. Case No. 23-11435) on May 17, 2023. In the petition signed by Michaela Hayes, 100 Percent LLC Member/President, the Debtor disclosed $35,700 in assets and $4,447,494 in liabilities. Judge Patricia M. Mayer oversees the case. Holly S. Miller, Esq., at Gellert, Scali, Busenkell and Brown, LLC, represents the Debtor as legal counsel. MALLINCKRODT PLC: Lenders Organize Prior to Opioid Trust Payment ---------------------------------------------------------------- Reshmi Basu and Rachel Butt of Bloomberg News report that lenders to Mallinckrodt Plc are mobilizing with legal counsel ahead of a $200 million settlement payment for the drugmaker's role in the opioid epidemic, according to people familiar with the situation. The payment -- due June 16 and earmarked for an opioid trust -- is supposed to be Mallinckrodt’s first since exiting bankruptcy a year ago and some lenders want the company to skip the payment in order to safeguard its liquidity, said the people, who asked not to be identified because the matter is private. About Mallinckrodt PLC Mallinckrodt -- http://www.mallinckrodt.com/-- is a global business consisting of multiple wholly-owned subsidiaries that develop, manufacture, market and distribute specialty pharmaceutical products and therapies. The company's Specialty Brands reportable segment's areas of focus include autoimmune and rare diseases in specialty areas like neurology, rheumatology, nephrology, pulmonology and ophthalmology; immunotherapy and neonatal respiratory critical care therapies; analgesics; and gastrointestinal products. Its Specialty Generics reportable segment includes specialty generic drugs and active pharmaceutical ingredients. On Oct. 12, 2020, Mallinckrodt plc and certain of its affiliates sought Chapter 11 protection in Delaware (Bankr. D. Del. Lead Case No. 20-12522) to seek approval of a restructuring that would reduce total debt by $1.3 billion and resolve opioid-related claims against them. Mallinckrodt plc disclosed $9,584,626,122 in assets and $8,647,811,427 in liabilities as of Sept. 25, 2020. Judge John T. Dorsey oversees the cases. The Debtors tapped Latham & Watkins, LLP and Richards, Layton & Finger, P.A. as their bankruptcy counsel; Arthur Cox and Wachtell, Lipton, Rosen & Katz as corporate and finance counsel; Ropes & Gray, LLP as litigation counsel; Torys, LLP as CCAA counsel; Guggenheim Securities, LLC as investment banker; and AlixPartners, LLP as restructuring advisor. Prime Clerk, LLC is the claims agent. The official committee of unsecured creditors retained Cooley, LLP, as its legal counsel; Robinson & Cole, LLP as co-counsel; and Dundon Advisers, LLC as financial advisor. On Oct. 27, 2020, the U.S. Trustee for Region 3 appointed an official committee of opioid-related claimants. The OCC tapped Akin Gump Strauss Hauer & Feld, LLP as its lead counsel; Cole Schotz as Delaware co-counsel; Province, Inc. as financial advisor; and Jefferies, LLC as investment banker. * * * Mallinckrodt plc on June 16, 2022, announced that it has successfully completed its reorganization process, emerged from Chapter 11 and completed the Irish Examinership proceedings. Implementing the Plan and the Scheme strengthens the Company's balance sheet, reduces its total debt by approximately $1.3 billion and enables it to move forward with more than $250 million in cash and cash equivalents on hand. The Plan and Scheme include key legal settlements that resolve opioid claims brought against the Company and litigation matters involving Acthar Gel, among other claims, and provides for significant equitization of the Company's guaranteed unsecured notes. MANCUSO MOTORSPORTS: Cash Collateral Access OK'd Thru July 28 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division, authorized Mancuso Motorsports, Inc. to use cash collateral on an interim basis in accordance with the budget, with a 10% variance, through July 28, 2023. In return for the Debtor's continued interim use of cash collateral, these parties are granted adequate protection for their purported secured interests in cash collateral equivalents, including the Debtor's cash, accounts receivable and inventory, among other collateral: Byline Bank Ryan Daube, as trustee of the Ryan Daube Trust DFK Direct Investments, LLC DFK Group, Inc. DFK Direct, LLC Francis Roti Ryan Daube Rob Mancuso The Debtor will maintain and pay premiums for insurance to cover the Collateral from fire, theft and water damage. The Secured Parties are granted replacement liens, attaching to the Collateral, but only to the extent of their pre-petition liens, with any valid liens attaching to the Collateral and its proceeds until further Order of Court. A further interim hearing on the matter is set for July 25 at 10 a.m. A copy of the Court's order and the Debtor's budget is available at https://urlcurt.com/u?l=EUfVsc from PacerMonitor.com. The Debtor projects total cash out, on a weekly basis, as follows: $39,199 for the week ending May 26, 2023; $173,687 for the week ending June 2, 2023; $41,678 for the week ending June 9, 2023; $119,366 for the week ending June 16, 2023; $58,567 for the week ending June 23, 2023; and $173,371 for the week ending June 30, 2023. About Mancuso Motorsports, Inc. Mancuso Motorsports, Inc. is a privately held company that provides automotive repair and maintenance services. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 22-14513) on December 16, 2022. In the petition signed by Jackie Cahan, CFO and COO, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Donald R. Cassling oversees the case. Scott R. Clar, Esq., at Crane, Simon, Clar & Goodman, serves ascounsel to the Debtor. MATLINPATTERSON GLOBAL: Liquidation Plan Confirmed by Judge ----------------------------------------------------------- Rick Archer of Law360 reports that the approval of MatlinPatterson's Chapter 11 liquidation plan was paused Thursday, May 18, 2023, after a last-minute hitch in one of the settlements the investment firm had reached to resolve disputes over a 17-year-old airline deal for a total of $64 million. After the hearing resumed on May 19, 2023, the Court agreed to enter findings of fact, conclusions of law and order confirming the Debtors' Second Amended Joint Chapter 11 11 Plan of Liquidation. A copy of the Confirmation Order is available at https://www.pacermonitor.com/view/AYXY7II/MatlinPatterson_Global_Opportunities__nysbke-21-11255__0915.0.pdf?mcid=tGE4TAMA JDK Aerospacial Inc., judgment creditor, on May 18, 2023, submitted a limited objection to confirmation of the Debtors' Plan because the proposed confirmation order filed by the Debtors is inconsistent with, and contrary to, the terms of HJDK's Court-approved HJDK Settlement Term Sheet. "Pursuant to the HJDK Settlement Term Sheet with the Debtors and this Court's Order approving it, on the Plan's effective date and subject to 2 conditions precedent, HJDK is to be paid $8.5 million in full satisfaction, from an escrow account containing $8.5 million funded and established last October 2022 by Zurich American Insurance Company. Pursuant to the terms of the HJDK Settlement Term Sheet, the subject $8.5 million payment to HJDK is to be made into KI Legal's IOLA account, deeming HJDK paid. The Plan and confirmation order must be consistent with the HJDK Settlement Term Sheet per its terms, but Debtors' proposed conformation order is not consistent due to an error in paragraph 87 of the proposed order: it wrongly seeks to change the recipient of the subject funds and it wrongly seeks to deem HJDK paid when the subject funds are paid to that other recipient’s account." HJDK said it will support the Plan if the requested changes are made to the proposed confirmation order. 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. METAL CHECK: Wins Cash Collateral Access Thru June 8 ---------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Oklahoma, authorized Metal Check, Inc. to use cash collateral on an interim basis in accordance with the budget, with a 10% variance, through June 8, 2023. An immediate and critical need exists for the Debtor to use cash in order to continue the operation and management of the Estate's businesses and assets. The Debtor and First United Bank are parties to agreements evidencing loans the bank extended to the Debtor. FUB holds a valid, perfected, secured claim against the Estate, which it asserts are secured by first-priority valid and perfected liens on, inter alia, all of the Estate's right, title, present and future interest in the Collateral. Approximately, $471,141 is owed on the Loan Claims as of the Petition Date. FUB has agreed to the Debtor's use of cash collateral to pay the ordinary and necessary operating expenses of the Estate's business and assets only for the period from May 25th, 2023 through and including June 8, 2023, at that time a revised budget will be circulated and if there are no objections, the period of time will be extended from June 8, 2023 until the final hearing date, pursuant to and in accordance with the terms of the Interim Order. FUB does not consent to the use of cash collateral beyond the Interim Period and reserves all objections of any kind to the use of cash collateral beyond the Interim Period. The Debtor submitted a budget reflecting projected revenue and expenses through August 15, 2023. The Debtor and the U.S. Trustee have reached an agreement to modifications to the budget as follows: 1. No equity draws will be allowed for the principal of the Debtor. 2. Payroll will be modified to reflect the Salary of the Diana Salazar as the sole means of compensation, in the amount of $3,600 per week. 3. Payroll will be modified to reflect the addition of a salary of Tipton Tyler Utt, whose pay had been cut but has resumed, at $1,800 weekly. 4. Rent will not be paid during the first interim period. 5. Monthly professional fees of $2,000 for each of the Debtor's professionals and the Subchapter V Trustee shall be placed into escrow for administrative fees payable upon Court approval. 6. Recognition that the Budget of the Debtor provides for payment of adequate protection payments to other secured creditors, which will not be paid until further order of the Court. A copy of the Court's order and the Debtor's budget is available at https://urlcurt.com/u?l=lIWRZE from PacerMonitor.com. The Debtor projects total cash paid out, on a weekly basis, as follows: $192,001 for Week 1; $192,001 for Week 2; $192,001 for Week 3; $236,101 for Week 4; $192,001 for Week 5; and $192,001 for Week 6. About Metal Check, Inc. Metal Check, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Okla. Case No. 23-11279) on May 16, 2023. In the petition signed by Diana Salazar, president, the Debtor disclosed $841,675 in assets and $2,033,069 in total liabilities. Judge Janice D. Loyd oversees the case. Christopher Wood, Esq., at Christopher A. Wood and Associates, PC, represents the Debtor as legal counsel. First United Bank and Trust Co, as lender, is represented by: John W. Mee III, Esq. MEE HOGE PLLP 50 Penn Place 1900 NW Expressway, Suite 1400 Oklahoma City, OIK 73118 Telephone: 405-848-9100 Facsimile: 405-848-9101 E-mail: Jwm3@meehoge.com MILLIES PANCAKE: Seeks Cash Collateral Access --------------------------------------------- Millies Pancake Shoppe II, Inc. asks the U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division, for authority to use cash collateral and provide adequate protection. The Debtor requires the use of cash collateral to finance its ongoing post-petition business operations. Prior to the Petition Date, the Debtor owed certain sums of money to several creditors, pursuant to certain promissory notes, business loan agreements, security agreements, pledge agreements, collateral assignments and other agreements, which were secured by UCC liens on the Debtor's assets. As of the Petition Date, Huntington Bank holds a first priority perfected lien on substantially all of the Debtor's pre-petition assets, including but not limited to, cash on hand, inventory, accounts receivable, and general intangibles, together with the proceeds thereof. The amount owed to Huntington of $447,285 is estimated to be far in excess of the value of the Debtor's assets, which is estimated to be approximately $62,175. The remaining junior creditors who filed liens are either wholly unsecured, or partially unsecured creditors pursuant to 11 U.S.C. section 506(a). As adequate protection for Huntington's and Junior Lienholders' interest in the cash collateral, the Debtor proposes to use the cash collateral solely for the purposes outlined in the Interim Cash Collateral Order and attached budget. The Debtor further proposes: (1) for any diminution in value of Huntington's interests in the cash collateral from and after the Petition date, grant Huntington a replacement lien on all of the Debtor's assets; (2) for any diminution in value of Huntington's interests in the cash collateral from and after the Petition date, grant Huntington an administrative expense claim pursuant to 11 U.S.C. section 507(b) and (3) grant Junior Lienholders replacement liens in the same priority that existed as of the Petition Date. A hearing on the matter is set for May 31, 2023 at 10 a.m. A copy of the motion is available at https://urlcurt.com/u?l=HrmKpE from PacerMonitor.com. About Millies Pancake Shoppe II, Inc. Millies Pancake Shoppe II, Inc. operates a breakfast and lunch restaurant located in Addison, Illinois. Due to a pending lawsuit with one of its receivables lenders and guaranties of debt for related restaurants that are no longer operating, Millies sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 23-06836) on May 24, 2023. In the petition signed by James Duda, president, the Debtor disclosed up to $100,000 in assets and up to $1 million in liabilities. Joshua D. Greene, Esq., at Joshua D. Greene, represents the Debtor as legal counsel. NATIONAL CINEMEDIA: Unsecureds Owed $729M Get 0.03% in Plan ----------------------------------------------------------- National Cinemedia, LLC submitted an Amended Disclosure Statement for the First Amended Plan of Reorganization. The Plan contemplates several Restructuring Transaction Steps. The anticipated benefits of the Plan include, without limitation, the following: * conversion of all of the Debtor's secured debt to 100% of the equity in the Reorganized Debtor subject to (a) reallocation of New NCM Common Units to NCMI pursuant to the NCMI 9019 Settlement (defined below) and (b) dilution on account of New NCM Common Units issued on account of, among other things, the Post-Emergence Management Incentive Plan, resulting in a fully de-levered Reorganized Debtor; * the Pro Rata distribution of a cash pool of $250,000 to Holders of General Unsecured Claims, plus a full recovery to Holders of General Unsecured Convenience Claims; * through the entry into the NCMI 9019 Settlement (which is a central part of the Plan), the maintenance of the current "Up-C" structure between the Debtor and its parent National CineMedia, Inc. which will, among other things, facilitate several key objectives of the Chapter 11 Case, such as the assumption of key executory contracts, including the Exhibitor Services Agreements or "ESAs" with American MultiCinema, Inc., Cinemark USA, Inc, and Regal Cinemas, Inc.; * the assumption of the ESAs, Tax Receivable Agreement, CUAA, MSA, and LLC Agreement, among other agreements, through the Plan as of the Effective Date; * the Debtor's emergence without any debt unless, following the NCMI 9019 Capital Contribution, to adequately fund the Reorganized Debtor, the Debtor seeks to obtain a revolving credit facility (an "RCF") from a third party lending institution; provided, that, despite its best efforts, if the Debtor is unable to obtain an RCF in an amount and on terms in each case reasonably acceptable to the Required Consenting Creditors, an exit facility shall be provided by one or more members of the Ad Hoc Group in the form, solely or partially, of a first lien term loan provided by Consenting Creditors on arm's-length terms in an amount estimated to be required to adequately fund the business (such amount to be determined among the Required Consenting Creditors, NCM, and their advisors); and * prompt emergence from Chapter 11. The Plan provides for a comprehensive restructuring of the Debtor's prepetition obligations, preserves the going-concern value of the Debtor's business, maximizes all stakeholder recoveries, and protects the jobs of the Debtor's employees. To evidence their support of the Debtor's restructuring, the Debtor's key stakeholders executed the Restructuring Support Agreement. Under the Plan, Class 4 General Unsecured Claims total $729.8 million and will recover 0.03% of their claims. "General Unsecured Claim" means any Claim other than an Administrative Claim, a Secured Tax Claim, an Other Secured Claim, a Priority Tax Claim, an Other Priority Claim, a Secured Debt Claim, a General Unsecured Convenience Claim, or a Section 510(b) Claim against the Debtor. On the Effective Date or as soon as reasonably practicable thereafter, in full and final satisfaction, compromise, settlement, release, and discharge of, and in exchange for, such Allowed General Unsecured Claims, each Holder of an Allowed General Unsecured Claim shall receive its Pro Rata share of the GUC Cash Pool. Class 5 General Unsecured Convenience Claims total $48,000 and will recover 100% of their claims. "General Unsecured Convenience Claim" means a General Unsecured Claim that (x) is Allowed in the amount of $2,500 or less and (y) would otherwise be considered a General Unsecured Claim; provided, however, that any General Unsecured Claim that is Allowed in excess of $2,500 shall not be treated as a General Unsecured Convenience Claim. Each Holder of an Allowed General Unsecured Convenience Claim shall receive, in full and final satisfaction of such Claim payment in full in Cash on (A) the Effective Date or (B) the date due in the ordinary course of business in accordance with the terms and conditions of the particular transaction giving rise to such Allowed General Unsecured Convenience Claim. The Debtor shall fund distributions under the Plan with: (a) Cash on hand, including Cash from operations; (b) the proceeds of the Exit Facility and the loans thereunder, if any; and (c) the NCMI 9019 Capital Contribution to be issued. Cash payments to be made pursuant to the Plan will be made by the Reorganized Debtor. From and after the Effective Date, the Reorganized Debtor, subject to any applicable limitations set forth in any post-Effective Date agreement (including the Exit Facility Documents, if any, and Amended LLC Agreement), shall have the right and authority without further order of the Bankruptcy Court to raise additional capital and obtain additional financing as the Reorganized Debtor deems appropriate. The following key dates and deadlines for the chapter 11 case as set forth in the Disclosure Statement and in the restructuring support agreement: * The Deadline for entry of an order approving the Disclosure Statement: June 12, 2023 (60 calendar days after the Petition Date). * The Deadline to object to entry of (i) an order approving the Disclosure Statement on a final basis and (ii) the Confirmation Order: 4:00 p.m. (Prevailing Central Time) on June 14, 2023. * The Voting Deadline for Holders of Secured Debt Claims and General Unsecured Claims to vote to accept or reject the Plan: 4:00 p.m. (Prevailing Central Time) on June 20, 2023. * The Deadline for entry of the Confirmation Order: July 25, 2023 (105 calendar days after the Petition Date). * The Deadline for the occurrence of the Effective Date: 60 calendar days after the date of entry of the Confirmation Order (subject to a possible 30-day extension associated with the timing for obtaining shareholder consent with respect to certain issues). Proposed Counsel for the Debtor: Paul M. Basta, Esq. Kyle J. Kimpler, Esq. Sarah Harnett, Esq. Shafaq Hasan, Esq. PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 1285 Avenue of the Americas New York, NY 10019-6064 Telephone: (212) 373-3023 Facsimile: (212) 492-0023 E-mail: pbasta@paulweiss.com kkimpler@paulweiss.com sharnett@paulweiss.com shasan@paulweiss.com - and - John F. Higgins, Esq. Eric M. English, Esq. M. Shane Johnson, Esq. Megan Young-John, Esq. Bryan L. Rochelle, Esq. PORTER HEDGES LLP 1000 Main Street, 36th Floor Houston, TX 77002 Telephone: (713) 226-6000 Facsimile: (713) 228-1331 E-mail: jhiggins@porterhedges.com eenglish@porterhedges.com sjohnson@porterhedges.com myoung-john@porterhedges.com brochelle@porterhedges.com A copy of the Disclosure Statement dated May 12, 2023, is available at https://bit.ly/3pI6EAG from PacerMonitor.com. About National CineMedia National CineMedia, LLC, based in Centennial, Colo., owns the largest cinema-advertising network in North America. NCM derives its revenue principally from the sale of advertising to national, regional, and local businesses, which is displayed on a national and regional digital network of movie theaters. National CineMedia, LLC, filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 23-90291) on April 11, 2023, listing $500 million to $1 billion in estimated assets; and $1 billion to $10 billion in estimated liabilities. The petition was signed by Ronnie Ng, chief financial officer of National CineMedia, Inc. The Hon. David R. Jones presides over the case. Paul, Weiss, Rifkind, Wharton & Garrison LLP, led by Paul M. Basta, Esq., Kyle J. Kimpler, Esq., Sarah Harnett, Esq., and Shafaq Hasan, Esq., serves as counsel to the Debtor. John F. Higgins, Esq., at Porter Hedges LLP, serves as the Debtor's local counsel. The Debtor tapped Latham & Watkins LLP as special corporate & litigation counsel; Lazard Freres & Co., as investment banker; FTI Consulting, Inc., as restructuring advisor; and Omni Agent Solutions as notice, claims and balloting agent. NEW YORK INN: Wins Interim Cash Collateral Access ------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas, Dallas Division, authorized New York Inn Inc. to use cash collateral on an interim basis in accordance with the budget, with a 15% variance. The Debtor requires the use of cash collateral to continue the operation of its business. Spectra Bank and the U.S. Small Business Administration assert an interest in the Debtor's cash collateral. To the extent of any diminution in value in their Pre-Petition Collateral, the Secured Lenders are granted valid, binding, enforceable, and perfected liens co-extensive with the Secured Lenders' pre-petition liens in all currently owned or hereafter acquired property and assets of the Debtor. The replacement liens granted to the Secured Lenders are automatically perfected without the need for filing of a UCC-1 financing statement with the Secretary of State's Office or any other such act of perfection. The Debtor is directed to pay Spectra Bank $4,000 or the amount agreed upon between the Debtor and the Bank, as adequate protection for use of cash collateral, on or before the 5th of each month, commencing in the month of February 2023. A final hearing on the matter is set for July 6, 2023, at 10:30 a.m. A copy of the Court's order and the Debtor's one month budget is available at https://urlcurt.com/u?l=1jHYkn from PacerMonitor.com. The Debtor projects $23,500 in total income and $10,687 in total expenses for one month. About New York Inn A group of creditors including AP Interior, Prateek Desai and Wajattat Ali Khan, filed an involuntary Chapter 11 petition against Arlington, Texas-based New York Inn Inc. (Bankr. N.D. Tex. Case No. 21-30958) on May 21, 2021. The creditors are represented by Bill Rielly, Esq. New York Inn Inc. owns and operates a hotel located in Arlington, Texas. After an involuntary bankruptcy petition was filed, New York Inn consented to an Order for Relief in order to restructure its debts after suffering reduced revenues from the downturn in the economy precipitated by the COVID-19 pandemic and as a result of the damage to the hotel following the Texas winter storm in February 2021. The hotel has been closed since that time. New York Inn is waiting for its property insurance company to release funds to pay for the necessary repairs so that it can reopen. New York Inn has commenced legal action to collect on its insurance and has retained an independent adjuster, a contractor and litigation counsel all of which it is seeking to employ to move this case along. The Debtor has $1.02 million in total assets and $2.35 million in total liabilities. Judge Michelle V. Larson oversees the case. New York Inn tapped Joyce W. Lindauer Attorney, PLLC as bankruptcy counsel. Katharine Battaia Clark serves as the Subchapter V Trustee. Under its Second Amended Plan of Reorganization Under Subchapter V of Chapter 11, the Debtor contemplates paying a 10% return to Allowed Unsecured Claims over 36 months. NORTHERN OIL: Fitch Affirms LongTerm IDR at B, Outlook Positive --------------------------------------------------------------- Fitch Ratings has affirmed Northern Oil and Gas, Inc.'s (NOG) Long-Term Issuer Default Rating (IDR) at 'B'. Fitch has also affirmed NOG's reserve-based lending (RBL) credit facility rating at 'BB'/'RR1', senior unsecured notes rating at 'B'/'RR4', and assigned a 'B'/'RR4' to the convertible senior notes. The Rating Outlook is Positive. NOG's ratings reflect Fitch's expectation of continued credit-friendly M&A activity, which should increase its overall size, scale and diversification toward 'B+' category thresholds. The Positive Outlook also considers Fitch's expectation for continued positive FCF generation secured by NOG's strong hedging program, which is expected to be applied to reduce gross debt and lead to improved credit metrics and liquidity over the next 6 months-12 months. The rating also considers Fitch's expectation that the company will increase borrowings under its RBL facility and expand its base dividend, both of which Fitch believes are mitigated by strong FCF generation and management's track record of debt repayment following acquisitions. KEY RATING DRIVERS Credit Conscious, Diversifying Transaction: Fitch views NOG's recently announced Forge joint acquisition with Vital Energy as credit positive given it will be fully funded with share issuances. NOG's purchase price of $162 million for 30% of the assets is expected to close at the end of June. In addition, NOG & Vital enhanced joint operating agreement will provide enhanced line-of-sight to development along with NOG executing hedges for a significant portion of the production. The company's acquisitions throughout 2022 and early 2023 have been funded through a combination of borrowings under the RBL, issuance of convertible bonds and positive FCF. These acquisitions have increased production from 53.8 thousand barrels of oil equivalent per day (mboepd) in 2021 to 2023 annual guidance range between 91 mboepd and 96 mboepd excluding the recently announced Forge joint acquisition. Fitch believes acquisitions will continue to be a part of the company's future growth strategy and expects management will continue to fund transactions in a credit-neutral manner. Non-Operator Status: The company acquires leasehold interests comprising of non-operated working interests in producing wells and nearby acreage, but does not control the drill bit or make operational decisions regarding timing and completion of wells. Fitch believes this limits operational and capital flexibility, especially in weak pricing environments, and leaves the company exposed to the decisions of its operating partners. Favorable Capital Deployment Flexibility: Fitch believes NOG's flexibility with well participation and capex allows for economic-driven decisions and improves overall returns. The company retains the ability to decline participation in uneconomic or lower-return wells, even within a multi-well, multi-reservoir development in some cases, to help optimize returns. As a non-operator, NOG does not have rig, drilling or midstream contracts and has no personnel at the field level, which limits corporate operational and financial obligations, and brings lower per-unit general and administrative costs. NOG has historically maintained approximately six years of proved, developed and producing (PDP) reserve life, which is expected to increase given the recent acquisitions. Favorable Liquidity, Capital Management: NOG's close relationship with its operators and the long lead times from initial new well development evaluation, investment decision, and funding provide visibility on future capital needs, and in conjunction with its hedging policy, help reduce overall liquidity risk despite the inability to control well timing and completion. The company is typically provided budgets and development plans from its operators a year in advance from the start of a new well, providing considerable time to manage capital flows with existing and future production. Fitch views these characteristics favorably and does not forecast material near-term liquidity needs in the base case. 18-Month Rolling Hedge Program: NOG has historically maintained a strong hedge book and expects to hedge approximately 60% of total production on a rolling 18-month basis going forward. The company currently has approximately 60% of oil production hedged at an average price of $77.72/bbl for the remainder of 2023 and approximately 65% of gas production hedged at an average price of $4.11/MMBtu. Fitch believes NOG's hedge book provides future cash flow certainty, which supports repayment of debt and supports the base dividend. Positive FCF; Sub-2.0x Leverage: Fitch forecasts positive FCF of approximately $170 million in 2023 and $180 million in 2024, assuming WTI oil prices of $80/bbl and $70/bbl, respectively. Fitch-calculated EBITDA leverage is forecast to approach 1.3x in 2023 and increases toward 2.0x in 2026 at Fitch's long-term mid-cycle WTI price of $50/bbl. Increasing Base Dividend: NOG increased the dividend quarter on quarter from $0.03/share in 2Q21 to $0.37/share announced in 2Q23. Fitch believes NOG is in a position to maintain shareholder returns while maintaining liquidity and credit metrics, given the company's increasing size and scale and a positive FCF profile supported by management's rolling hedge program. DERIVATION SUMMARY NOG is a leading non-operator exploration and production (E&P) company focused in the Permian, Marcellus and Williston Basins with 1Q23 production of approximately 87 mboepd following recent acquisitions. As a non-operator mineral and royalty interest owner, Viper Energy Partners, LP (BB-/Stable; 35.0 mboepd in 1Q23) has minimal operating costs and no capex, which results in netbacks that are generally the highest of Fitch's E&P peer group. Viper's Long-Term IDR receives a one notch uplift given its significant operational and strategic ties with its higher rated parent Diamondback Energy, Inc. (BBB/Stable), which provides unique visibility into future development plans and reduces volumetric and cash flow uncertainty. NOG's production size is larger than offshore producer Talos Energy Inc. (B/Stable; 63.6 mboepd, which partly includes the EnVen acquisition during 1Q23), but smaller than Permian operator Callon Petroleum Company (B/Rating Watch Positive; 100.0 mboepd in 1Q23) and SM Energy Company (BB-/Stable; 146.4 mboepd in 1Q23). In terms of cost structure at 4Q22, NOG's Fitch-calculated unhedged cash netback of $52.4 per barrel of oil equivalent (boe) (73% margin) is weaker than Viper's $59.7/boe (87% margin) and Talos Energy's $56.7/boe (75% margin), but stronger than Callon Petroleum's $46.1/boe (64% margin) and SM Energy ($47.04/boe; 74% margin). On an EBITDA leverage basis, Fitch expects NOG to maintain a sub-2.0x leverage profile as it allocates FCF towards repayment of the RBL facility and then towards shareholder returns. This is in line with 'B' category peers that typically see leverage oscillate between 2.0x and 3.0x on a mid-cycle basis. KEY ASSUMPTIONS Fitch's Key Assumptions Within the Rating Case for the Issuer Include: - West Texas Intermediate (WTI) prices of $80.00/bbl, $70.00/bbl, $60.00/bbl and $50.00/bbl in 2023, 2024, 2025 and 2026 respectively; - Henry Hub prices of $3.50/mcf, $3.50/mcf, $3.00/mcf, and $2.75/mcf in 2023, 2024, 2025 and 2026 respectively; - Assumed Forge acquisition closes in June 2023 and assumes acquisitions of $100 million per annum thereafter which are majority equity funded, to facilitate mid-single digit production growth; - Capex grows to $870 million in 2023 and decreases to $775 million/year in outer years of the forecast; - Prioritization of forecast FCF towards repayment of the RBL facility along with marginal increase in dividends going forward. RECOVERY ASSUMPTIONS: The recovery analysis assumes that NOG would be reorganized as a going-concern (GC) in bankruptcy rather than liquidated. Fitch has assumed a 10% administrative claim. GC Approach - Fitch assumed a bankruptcy scenario exit EBITDA of $500 million. This estimate considers a prolonged commodity price downturn ($32/WTI and $2.25/mcf gas lows in 2025, increasing to $42/bbl WTI and $2.25/mcf gas in 2026) coupled with a combination of prolonged, unexpected production shut-ins, new well/PDP underperformance, higher operating expenses per boe, or working capital delays causing lower than expected production and borrowing base-linked liquidity constraints; - The GC EBITDA assumption reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which Fitch bases the enterprise valuation (EV), which reflects the decline from current pricing levels to stressed levels and then a partial recovery coming out of a troughed pricing environment. Fitch believes a weakened pricing environment will slow production and PDP reserve growth, reduce the borrowing base availability and materially erode the liquidity profile. An EV multiple of 3.50x EBITDA is applied to the GC EBITDA to calculate a post-reorganization EV: - The historical bankruptcy case study exit multiples for peer companies ranged from 2.8x-7.0x, with an average of 5.2x and a median of 5.4x; - The multiple also reflects NOG's multi-basin, diversified portfolio of non-operated working interests with only a few potential buyers. Liquidation Approach - The liquidation estimate reflects Fitch's view of the value of the company's E&P assets that can be realized in sale or liquidation processes conducted during a bankruptcy or insolvency proceeding and distributed to creditors. Fitch used NOG's recent transactions and historical third-party, non-operated transaction data for both the Williston and Permian assets on a $/bbl, $/1P, $/2P, $/acre and PDP PV-10 basis to attempt to determine a reasonable sale; - The RBL facility is assumed to be 100% drawn given the likelihood of negative redetermination in a sustained low-price environment; - The allocation of value in the liability waterfall results in recoveries corresponding to 'RR1' for the senior secured RBL and 'RR4' for the senior unsecured notes. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Consistent FCF generation with proceeds used to reduce gross debt that leads to mid-cycle EBITDA leverage sustained below 2.0x; and - Consistent track record of reserve replacement and total production approaching 100 mboepd; - Continued track record of favorable risk management that leads to financial flexibility including adequate reserve maintenance. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Inability to generate FCF and reduce outstanding gross debt that leads to mid-cycle EBITDA leverage sustained above 3.0x; - Total production sustained below 80 mboepd and erosion of the reserve base; - Limited financial flexibility and a decline in reserves that limits future production growth potential. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: Fitch does not see material near-term liquidity needs given the company's operational and liquidity flexibility and believes NOG's forecast FCF generation supports repayment of the RBL facility and notes. The current borrowing base is $1.6 billion ($1.0 billion elected commitment), which does not incorporate the 4Q22 or 1Q23 reserves from the recently closed acquisitions. At 1Q23, NOG had $431 million available under the RBL facility and cash on hand of $6 million. Pro forma the recent senior unsecured note issuance, NOG is expected to have approximately $900 million of borrowing capacity under the $1.0 billion RBL facility. The RBL facility is subject to a semi-annual borrowing base redetermination in addition to financial covenants, including a maximum total net leverage ratio of below 3.50x and a minimum current ratio of at least 1.0x. Clear Maturity Profile: Pro forma the unsecured notes issuance, NOG's maturity schedule remains light with no maturities until the RBL facility matures in June 2027. The $705.1 million senior unsecured note comes due in 2028, and the senior unsecured note comes due in 2031. ISSUER PROFILE Northern Oil and Gas, Inc. (NOG) is a leading non-operator E&P company focused in the Permian, Marcellus and Williston Basins. ESG CONSIDERATIONS NOG has an ESG Relevance Score of '4' for energy management that reflects the company's cost competitiveness and financial and operational flexibility due to scale, business mix, and diversification. This factor has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Northern Oil and Gas, Inc. LT IDR B Affirmed B senior unsecured LT B New Rating RR4 senior unsecured LT B Affirmed RR4 B senior secured LT BB Affirmed RR1 BB NORTHWOODS PETS: Court OKs Interim Cash Collateral Access --------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Wisconsin authorized Northwoods Pets, LLC to use cash collateral on an interim basis in accordance with the budget, pending a final hearing set for June 27, 2023, at 1:30 p.m. The Debtor opened for business in February 2020, shortly prior to the beginning of the Covid-19 Pandemic lockdowns which started in mid-March 2020. In 2020, business was strong, as many people were staying home and purchasing pets to fill their newfound free time. The Debtor expanded, and costs increased. However, business slowed in 2021, which continued into 2022 and 2023. The Debtor ultimately cut staff, and is in the process of downsizing its leased space. In order to finance operations, the Debtor borrowed from multiple lenders and granted security interests in its inventory and accounts, among other collateral. In addition, the Debtor fell behind on sales taxes owed to the State of Wisconsin Department of Revenue, resulting in tax warrants being levied by the DOR. The outstanding secured debts and apparent order of priority of the creditors claiming a lien interest in collateral are as follows: a. Nicolet National Bank, owed approximately $9,000, with a lien perfected on February 13, 2020 as UCC-1 financing statement # 20200213000433-4 filed with the Wisconsin Department of Financial Institutions; b. Kapitus Servicing, Inc., owed approximately $131,128, with a lien perfected, upon information and belief, on July 9, 2021 as UCC-1 financing statement # 20210709000537-0 filed with the Wisconsin Department of Financial Institutions by C T Corporation System, as representative. Of this debt, it appears that approximately 50.08% has priority dating to an initial loan funded on July 9, 2021, and the balance has priority junior to several of DOR tax warrants and dating to November 10, 2021 which was the date of a loan refinance between the Debtor and Kapitus, at which time the parties entered into a new loan for $130,000 which included the refinance of $66,103 still outstanding from the prior July 9, 2021 loan; c. The DOR, owed approximately $27,736 on account of tax warrants filed as follows: i. Tax Warrant # 43-12204455 for $12,493, filed on August 10, 2021 in Oneida County Case # 2021-TW-000080; ii. Tax Warrant # 43-12210550 for $4,776, filed on August 31, 2021 in Oneida County Case # 2021-TW-000088; iii. Tax Warrant # 43-12215455 for $4,041, filed on September 27, 2021 in Oneida County Case # 2021-TW-000123; iv. Tax Warrant # 43-12223432 for $6,425, filed on October 25, 2021 in Oneida County Case # 2021-TW-000136 for $6,425; d. DMKA, LLC d/b/a The Smarter Merchant, owed approximately $105,000, with a lien perfected on January 11, 2022 as UCC-1 financing statement # 20220111000731-4 filed with the Wisconsin Department of Financial Institutions e. The DOR, owed approximately $15,016 on account of additional tax warrants filed as follows: i. Tax Warrant # 43-12256702 for $5,356, filed on March 13, 2023 in Oneida County Case # 2023-TW-000056; ii. Tax Warrant # 43-12255996 for $4,876, filed on March 28, 2023 in Oneida County Case # 2023-TW-000082 iii. Tax Warrant # 43-12256323 for $4,784, filed on May 1, 2023 in Oneida County Case # 2023-TW-000106 f. Martha Cole, owed approximately $22,500, with liens perfected on April 27, 2022 as UCC-1 financing statements # 20230427000674-7 and # 20230427000675-6 filed with the Wisconsin Department of Financial Institutions. As of the Petition Date, the Debtor owes the Creditors approximately $310,380. The Court said the creditors will continue to be secured by the Debtor's assets on a post-petition basis, to the same extent and priority as their claims were secured on the Petition Date. The Debtor will escrow adequate protection payments in the Steinhilber Swanson LLP Client Escrow Trust Account, to be disbursed to the Creditors upon determination of the priority and extent of the liens in the cash collateral pursuant to subsequent motion and order. The Debtor will make monthly payments in the amount of $848 per month. The payments will be made on or before the 15th day of each month with the first payment due June 15, 2023. The Debtor will keep in full force and effect all casualty insurance on Creditors' collateral. A copy of the motion is available at https://urlcurt.com/u?l=HORPOM from PacerMonitor.com. A copy of the order is available at https://urlcurt.com/u?l=lnyjgQ from PacerMonitor.com. About Northwoods Pets, LLC Northwoods Pets, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Wisc. Case No. 1-23-10800) on May 1, 2023. In the petition signed by Jennifer L. Marshall, sole member, the Debtor disclosed up to $500,000 in both assets and liabilities. Judge Thomas M. Lynch oversees the case. John W. Menn, Esq., at Steinhilber Swanson LLP, represents the Debtor as legal counsel. NOV INC: Egan-Jones Retains B+ Senior Unsecured Ratings ------------------------------------------------------- Egan-Jones Ratings Company on May 8, 2023, maintained its 'B+' foreign currency and local currency senior unsecured ratings on debt issued by NOV Inc. Headquartered in Houston, Texas, NOV Inc offers equipment and components used in oil and gas drilling and production operations, oilfield services, and supply chain integration services to the upstream oil and gas industry. P&P CONSTRUCTION: Court OKs Interim Cash Collateral Access ---------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, authorized P&P Construction Group, LLC and affiliates to use cash collateral on an interim basis in accordance with the budget, with a 10% variance. The Debtors require the use of cash collateral to pay their direct operating expenses and obtain goods and services needed to carry on their businesses. The Debtors are alleged to be party to a Loan and Security, dated December 31, 2021, between Debtor BRH-Garver Construction, LLC, as borrower, Debtor P&P Construction Group, LLC, as guarantor, and Community Bank of Texas, N.A., as lender, pursuant to which the Prepetition Lender made available to Garver a term loan facility in the original principal amount of $18 million and a revolving credit facility up to $3 million or a lesser amount determined by the borrowing base provisions under the Prepetition Loan Agreement. As of the Petition Date, the outstanding principal balance due under the Term Loan was alleged to be approximately $12.1 million, and the outstanding principal balance due under the Revolver was alleged to be $4 million, in each case plus accrued interest, fees, and other charges due and payable under the Prepetition Loan Agreement. The Prepetition Loans are alleged to be secured by first priority liens on and security interests in substantially all of Garver's assets, including the Garver's accounts receivable and equipment. P&P Construction Group, LLC, guaranteed repayment of the Term Loan on the terms set forth in the Guaranty Agreement executed by P&P Construction Group, LLC, in favor of the Prepetition Lender contemporaneously with the Prepetition Loan Agreement. As adequate protection, the Prepetition Lender is granted valid, perfected liens and enforceable post-petition replacement security interests in all property of the Debtors. The Replacement Lien will be in addition to all other rights of the Prepetition Lender, including the Prepetition Lender's existing prepetition liens on and security interests in property of the Debtors. As further adequate protection, the Prepetition Lender is granted pursuant to 11 U.S.C. section 507(b) a superpriority claim in such amount if and to the extent the Replacement Lien is insufficient to provide adequate protection against the diminution, if any, in value of the Prepetition Lender's interest in any collateral resulting from the use of cash collateral. The priority of the Superpriority Claim will be senior in priority of payment over the Debtors' intercompany administrative claims and any and all administrative expenses of the kinds specified or ordered pursuant to any provision of the Bankruptcy Code. As further adequate protection, the Debtors will make a monthly cash payment to the Prepetition Lender in the amount of $25,000 commencing on June 1, 2023, and monthly thereafter until the occurrence of a Termination Event. The Prepetition Liens and the interests of the Sureties, if any, in cash collateral, including Bonded Contract Proceeds, are subject and subordinate in all respects to a carve-out in an amount equal to the sum of (i) all fees required to be paid to the Clerk of the Court and to the Office of the United States Trustee under 28 U.S.C. section 1930(a) plus interest at the statutory rate pursuant to 31 U.S.C. section 3717; (ii) all reasonable fees, costs, and expenses up to $100,000 incurred by a trustee under section 726(b); (iii) to the extent allowed by the Court on an interim or final basis at any time, all unpaid fees, costs, and expenses of the Debtors (up to $100,000) or any statutory committee (up to $50,000) earned, accrued, or incurred by persons or firms retained by the Debtors. The Debtors' access to cash collateral will terminate upon earliest to occur of any of the following: (a) July 24, 2023; (b) 30 days after the entry of the Interim Order, unless on or before such date the Debtors file a plan of reorganization and accompanying disclosure statement or a motion for approval of a bid procedure and sale process; (c) The Debtors' chapter 11 cases are dismissed or converted to cases under chapter 7 of the Bankruptcy Code; (d) Either (i) the Court enters an order appointing a trustee or an examiner with enlarged powers (beyond those set forth in sections 1104(c) and 1106(a)(3) and (4)) for the Debtors; or (ii) the Debtors file a motion, application, or other pleading consenting to or acquiescing in any such appointment; (e) The Court suspends these chapter 11 cases under section 305; (f) A transaction is consummated that results in the sale or disposition of all or substantially all of the assets of the Debtors and their estates; (g) The Interim Order becomes stayed, reversed, vacated, amended, or otherwise modified in any respect without the prior written consent of Prepetition Lender; (h) the Court enters an order terminating or modifying the automatic stay for any creditor asserting a lien in the Collateral other than the Prepetition Lender; (i) the Court enters an order invalidating, subordinating, or otherwise sustaining any Challenge to the Prepetition Liens, the Replacement Liens, or the Superpriority Claims granted to the Prepetition Lender; (j) The occurrence of any Event of Default under the terms of the Interim Order which remains uncured for five business days after the written notice of such Event of Default is filed with the Court and served upon counsel for the Debtors; and (k) With respect to the Sureties, any Bonded Contract is terminated by the Debtors or by further Court order, but only as to the Bonded Contract Proceeds relating to such Bonded Contract. These events constitute an "Event of Default": (a) The Debtors fail to timely and punctually perform any of their obligations in accordance with the terms hereof or otherwise defaults hereunder or breaches any provision thereof; (b) Any representation or warranty made in any certificate, report, expense statement, other financial statement, or other document delivered to the Prepetition Lender or the Sureties after the Petition Date proves to have been false or misleading in any material respect as of the time when made or given; (c) Any other person or entity obtains an order permitting the use of cash collateral without the written consent of the Prepetition Lender; and (d) The Replacement Liens granted to the Prepetition Lender ceases to convey, subject to the Carve-Out, a valid and perfected first priority lien on and security interest in the property of the Debtors. (e) Any Surety or obligee on a Bonded Project receives a notice of claim sent by a subcontractor, supplier, vendor, or laborer under Subchapter C of Chapter 2253 of the Texas Government Code for labor performed or materials provided, including equipment rental, after the Petition Date, for which such claimant has not been paid. A further status conference on the matter is set for June 29 at 1 p.m. A copy of the Court's order and the Debtor's budget is available at https://urlcurt.com/u?l=0LHkN2 from PacerMonitor.com. The Debtor projects total net cash flow, on a weekly basis, as follows: $710,433 for the week starting May 12, 2023; $901,052 for the week starting May 19, 2023; $1,051,790 for the week starting May 26, 2023; and $1,127,869 for the week starting June 2, 2023. About P&P Construction Group, LLC P&P Construction Group, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-90292) on April 12, 2023. In the petition signed by Jeffrey Anapolsky, its chief executive officer, the Debtor disclosed up to $10 million in assets and up to $50 million in liabilities. Judge Christopher Lopez oversees the case. Michael P. Cooley, Esq., at Reed Smith, LLP, represents the Debtor as legal counsel. PACKERS HOLDINGS: Fitch Alters Outlook on 'B-' IDR to Negative -------------------------------------------------------------- Fitch Ratings has revised Packers Holdings, LLC's (PSSI) Rating Outlook to Negative from Stable. Fitch has also affirmed PSSI's Issuer Default Rating (IDR) at 'B-' and its outstanding term loans and revolver at 'B'/'RR3'. The Negative Outlook reflects the near-term pressure on liquidity and elevated leverage as higher than previously expected customer attrition weighs on the company's financial performance in 2023. The Outlook is balanced by the company's leading market position, high degree of regulation, and material switching costs that help support a potential stabilization of operations ahead of the mezzanine debt due in December 2025. Fitch recognizes continued customer attrition could heighten distressed debt exchange risk with the mezzanine debt but its bilateral nature moderates this risk. Fitch would consider negative rating action if ESG-linked customer risks further heightens liquidity and refinancing risk, or if financial metrics sustained above thresholds commensurate with a 'B-' rating beyond the next 18 to 24 months. KEY RATING DRIVERS Attrition, Pass-throughs Hit Cash Flows: Fitch expects Cargill Incorporated's (Cargill; A/Stable) announced termination of its relationship with PSSI will have an adverse impact on PSSI's 2023 financial performance. Combined with a lag in passing through higher costs to customers and higher operating costs associated with contracts ending, the company's EBITDA leverage and financial flexibility are expected to be weaker than when Fitch stabilized the Outlook in March 2023. Fitch expects the company's financial performance to improve over the forecast horizon as the company wins new contracts, manages customer attrition, passes through inflation costs to customers, and demonstrates adherence to stricter compliance practices. Fitch believes roughly half of the EBITDA loss is associated with a lag effect in passing through higher costs, or transitional in nature. The recent challenges adds uncertainty to the company's ability to navigate through near-term headwinds and lowers the margin of safety. PSSI has lost individual contracts including at facilities where labor violations were found but the company's relationships with other key customers remain intact. Fitch believes the risk of further contract loss and attrition is partially mitigated by its market position, scale, and capabilities. As the largest contract sanitation company for the food processing industry in North America, PSSI has a limited set of competitors that can fully service large plants or quickly relocate resources to address customer needs. The industrial food preparation segment is highly fragmented across the U.S. and Canada. Heightening Liquidity, Refinancing Risks: Fitch expects the customer attrition and margin pressure to contribute to negative FCF for PSSI in 2023. PSSI' liquidity should be sufficient, albeit strained, barring an acceleration in customer attrition; at the end of 2022, the company had total liquidity of $125 million at the end of 2022 including $105 million of cash and $20 million available on its million revolver. PSSI has historically demonstrated consistent profitability and strong FCF generation and Fitch expects PSSI's FCF to recover in 2024. The company's maturity schedule is somewhat spread out with $1.2 billion of the company's $1.5 billion total debt comprised of senior secured term loans due in March 2028. The company does have $250 million in mezzanine debt due in December 2025. Separately, interest rate risk is partially mitigated by PSSI's interest rate hedging program with almost half of the company's total debt hedged against interest rates. Growing Pipeline Could Support 2024 Rebound: Despite the recent challenges, management indicated its pipeline is beginning to show signs of recovering. According to management, it expects revenues to rebound by mid-single-digits in 2024 as the impact of lost businesses wane, new business wins, and price recovery. Under this scenario, Fitch expects PSSI's EBITDA interest coverage could improve to 1.6x and 1.9x in 2024 and 2025, respectively, while PSSI's leverage will improve to around 7.5x, Fitch's negative sensitivity, in 2025. Customer Concentration: Fitch considers PSSI's customer concentration one of its more material concerns, particularly in light of the recently concluded investigation and Cargill's announcement. Fitch estimates the company's top-five customers comprise approximately one-half of the company's revenue. The complete loss of any of these top customers would significantly affect the company's financial performance and, consequentially, its credit profile. The concentration is moderated by the fact that these relationships are spread out across dozens of unique plants that have discrete plant managers, each responsible for plant performance and regulatory compliance, who decide to employ PSSI's services. Additionally, contracts are typically negotiated on a plant-by-plant basis, rather than on a corporate level, although corporate relationships may affect broader wins, renewals and losses. Necessity of Service: Fitch believes the company's ratings are supported by its clear and strong position and regulatory barriers. All U.S. protein plants are USDA-inspected daily prior to opening. Protein plants must pass these daily inspections or be subject to fines, citations and production delays with costs running in the tens-of-thousands of dollars per hour. In addition, non-protein plants are regularly reviewed by the FDA with end customers such as Walmart, McDonalds and Subway driving higher sanitation standards. DERIVATION SUMMARY PSSI has historically compared favorably to its industry peers in terms of cash flow generation, strategy and profitability. In particular, Fitch considers the company's historical track record of stable FCF margins to be credit supportive compared with similarly rated companies. Fitch also considers PSSI to be differentiated from its other 'B-' rated peers due to its strong market position within its segment. Many other companies in the 'B' category operate in highly fragmented markets with minimal competitive advantage. The company's rating is somewhat limited due to its leverage, which is high compared to similarly rated companies. The propensity for shareholder-focused leveraging transactions was also a rating consideration. There are no parent/subsidiary, Country Ceiling or operating environment influences or constraints on this rating. KEY ASSUMPTIONS - Sales to decline in 2023 as the company experiences the progressive loss of Cargill and other contracts; mid-single-digit annual growth over the next few years beyond 2023; - EBITDA margins contract near term but return to historical levels over time; - Capital intensity of about 1% to 2% of sales over the forecast period; - Acquisitions, sponsor dividends and dividend recapitalization transactions are limited near term; - Limited litigation risk stemming from the federal investigation; - Effective interest rate in the 6.7%-8.0% range through FY26. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Increased confidence of PSSI's ability to retain key customers and sign new contracts, and demonstrated continued adherence to strict compliance standards; - Shift to a more conservative financial policy, leading to an EBITDA leverage sustained below 5.5x; - EBITDA interest coverage paid sustained above 2.5x. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Continued customer attrition results in deterioration of financial and competitive positions; - EBITDA interest coverage sustained below 1.5x and/or EBITDA leverage consistently above 7.5x, heightened refinancing risk; - Heightened liquidity risks, including credit facility availability below 50% or sustained negative FCF; The Outlook could be stabilized if PSSI's customer attrition abates and PSSI's pipeline of new customer and business wins normalizes. LIQUIDITY AND DEBT STRUCTURE Forecasted Liquidity Erosion: Fitch expects PSSI's liquidity to erode in 2023, but remain adequate to maintain operations via the company's cash and revolver. Fitch currently expects FCF to be negative in 2023 but for PSSI, assuming a stabilization of operations, to generate positive FCF in 2024 and over the remainder of the rating horizon. The company has a relatively nimble operating structure and minimal annual maintenance capex. Fitch does not consider any of the company's cash to be restricted, and Fitch does not believe the company requires a material cash balance to sustain its normal operations, given its lean operating structure and minimal fixed costs. Fitch considers the company's capital structure and maturity schedule to be somewhat spread out as the company's capital structure consists of $1.2 billion in senior secured term loans due in 2028 and a $250 in mezzanine debt due in December 2025. ISSUER PROFILE Packers Holdings is North America's largest and only nationwide provider of mission-critical outsourced cleaning and sanitation services to the growing food processing industry. The company and its subsidiaries serve a broad customer base of protein and non-protein (e.g., bakery, produce, snack food) processing plants. ESG CONSIDERATIONS Packers Holdings, LLC has an ESG Relevance Score of '4' for Labor Relations & Practices due to the recent Department of Labor investigation that is leading to customer attrition, which has a negative impact on the credit profile and is relevant to the ratings in conjunction with other factors. Packers Holdings, LLC has an ESG Relevance Score of '4' for Management Strategy due to concerns on inadequate risk governance and controls or possibly misaligned incentives contributing to alleged labor violations, which has a negative impact on the credit profile and is relevant to the ratings in conjunction with other factors. Packers Holdings, LLC has an ESG Relevance Score of '4' for Governance Structure due to its exposure to board independence risk, due to sponsor ownership and the potential for aggressive shareholder distributions which also has a negative impact on the credit profile and is relevant to the ratings in conjunction with other factors. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Packers Holdings, LLC LT IDR B- Affirmed B- senior secured LT B Affirmed RR3 B PARADOX RESOURCES: Court OKs Interim Cash Collateral Access ----------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, authorized Paradox Resources, LLC to use cash collateral on an interim basis in accordance with the budget. The Debtor requires the use of cash collateral to continue the Debtors' ordinary course business operations and to maintain the value of the bankruptcy estates. To the extent of any Diminution in Value, each Secured Lender is granted valid, automatically perfected and enforceable additional adequate protection replacement liens, in accordance with the priority of the applicable Secured Lender and subject to the Carve-Out and only in collateral of the same type as such Secured Lender has a valid prepetition lien. The Replacement Liens will at all times be senior to any security interest, assignment, or lien of any creditor or other party in interest in this Chapter 11 Case other than the Carve-Out, and except for any liens, security interests, or setoff rights existing on the Petition Date that are valid, properly perfected, unavoidable, and senior to any prepetition liens of the respective Secured Lenders, in which case the Replacement Liens will be immediately junior in priority to such preexisting senior interests. Subject to the Carve-Out, and to the extent of any Diminution in Value, the Secured Lenders are further granted an allowed superpriority administrative expense claim, as provided and to the full extent allowed by 11 U.S.C. sections 503(b) and 507(b), with priority over all administrative expense claims and unsecured claims against the Debtor and its estate, now existing or hereafter arising, of any kind or nature whatsoever. The Carve-Out means: (a) quarterly fees required to be paid pursuant to 28 U.S.C. section 1930(a)(6); and any fees payable to the Clerk of the Bankruptcy Court; (b) actually incurred expenses included in the Budget but unpaid as of the termination of the Debtors' right to use cash collateral under the Interim Order; and (c) the aggregate amount of any fees and expenses of any estate professionals included in the Budget which are actually incurred, but unpaid as of the termination of the Debtors' right to use cash collateral under the Interim Order, but only to the extent incurred and unpaid, such fees and expenses have been previously or subsequently are approved by the Court and only to the extent such incurred and unpaid fees and expenses exceed any retainer held by any such Professional at the time of such termination. A final hearing on the matter is set for June 1, 2023 at 3:30 p.m. A copy of the Court's order and the Debtor's budget is available at https://urlcurt.com/u?l=mUjKjI from PacerMonitor.com. The Debtor projects total operating disbursements, on a weekly basis, as follows: $10,000 for the week ending May 28, 2023; $721,395 for the week ending June 4, 2023; $225,851 for the week ending June 11, 2023; $316,250 for the week ending June 18, 2023; and $250,946 for the week ending June 25, 2023. About Paradox Resources, LLC Paradox Resources, LLC is an integrated energy company that now owns multiple producing oil and gas fields. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 23-90558) on May 22, 2023. In the petition signed by Todd A. Brooks, CEO, the Debtor disclosed up to $100 million in both assets and liabilities. Judge David R. Jones oversees the case. The Debtor tapped Okin Adams Bartlett Curry LLP as legal counsel, Stout Risius Ross, LLC as restructuring advisor, and Donlin, Recano & Co., Inc. as notice, claims and balloting agent. PARAMOUNT RESTYLING: Court OKs Deal on Cash Collateral Access ------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California, Riverside Division authorized Paramount Restyling Automotive Inc. to use cash collateral on an interim basis in accordance with its agreement with GemCap Holdings, LLC and the U.S. Small Business Administration. The parties have agreed to further extend the Debtor's use of cash collateral through and including July 9, 2023 pursuant to the budget and make all payments to GemCap and the SBA set forth in the Amended Budget. As previously reported by the Troubled Company Reporter, the Debtor is in arrears on its payments, each in the amount of $36,000, owed to GemCap for the months of March and April 2023 under the Budget. GemCap asserts a claim in the approximate amount of $2.123 million and its claim is secured by first priority security interests and liens upon substantially all of the Debtor's assets. The SBA asserts a claim in the approximate amount of $503,129, which is secured by second priority security interests and liens upon substantially all of the Debtor's assets. A copy of the stipulation and budget is available at https://urlcurt.com/u?l=yBCOGL from PacerMonitor.com. A copy of the order is available at https://urlcurt.com/u?l=hPqeOB from PacerMonitor.com. The Debtor projects total cash paid out, on a monthly basis, as follows: $739,719 for June 2023; and $733,298 for July 2023. About Paramount Restyling Automotive Inc. Paramount Restyling Automotive Inc. is a manufacturer of automotive parts, accessories, and tires. The Debtors sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-10069) on January 9, 2023. In the petition signed by Samson Yang, vice president and authorized signatory, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Wayne Johnson oversees the case. David L. Neale, Esq., at Levene, Neale, Bender, Yoo & Golubchik, LLP, represents the Debtor as legal counsel. PEACE EQUIPMENT: Court OKs Cash Collateral Access Thru June 5 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas, McAllen Division, authorized Peace Equipment LLC to use cash collatral on an interim basis in accordance with the budget, until the June 5, 2023 hearing. The hearing is set for 10 a.m. The Court said Commercial Credit Group, Inc. and Crestmark TPG, LLC will continue to have the same liens, encumbrances and security interests in the cash collateral generated or created post filing, plus all proceeds, products, accounts, or profits thereof, as existed prior to the filing date. The Debtor is directed prior to the occurrence of the June 5 hearing to deliver to the Lenders a reconciliation of all budgeted amounts in the budget as well as updated projections of revenue and expenses. At a lender's request, the Debtor will provide to the Lenders copies of all insurance policies currently in force, and further continue to keep all collateral of the Lenders fully insured against all loss, peril and hazard with substantially similar coverage as in the past. The Debtor will keep the Lenders' collateral free and clear of post-petition liens, encumbrances, and security interests except for such claims as may accrue but are not currently owed such as ad valorem and similar taxes. A copy of the Court's order and the Debtor's budget is available at https://urlcurt.com/u?l=nQjwbH from PacerMonitor.com. The Debtor projects $475,000 in total revenue and $448,095 in total expenses for 30 days. About Peace Equipment, LLC Peace Equipment, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-70098) on May 24, 2023. In the petition signed by Alejandro G. Mascorro, president, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Eduardo V. Rodriguez oversees the case. Reese W. Baker, Esq., at Baker and Associates, represents the Debtor as legal counsel. PEACE EQUIPMENT: Files Emergency Bid to Use Cash Collateral ----------------------------------------------------------- Peace Equipment, LLC asks the U.S. Bankruptcy Court for the Southern District of Texas, McAllen Division, for authority to use cash collateral and provide adequate protection. The Debtor requests preliminary and interim use of its cash collateral to pay necessary expenses of its business in the ordinary course. The creditors that purport to hold liens or security interests in inventory and accounts are Commercial Credit Group, Inc. and Crestmark TPG, LLC. The Debtor does not believe these creditors -- Ascentium Capital, Balboa Capital, BMO Transportation Finance, Hidalgo County Appraisal District, Paccar Financial Corp, TransLease, Inc., and Triumph TBK Bank -- have a security interest in inventory and accounts, yet these creditors are listed in an abundance of caution, and to ensure adequate notice to all creditors that may assert a security interest on cash collateral. The Debtor will notify these creditors. The Debtor proposes to adequately protect the interests of the Lenders in the collateral in a number of ways. The Debtor proposes to grant the Lenders post-petition replacement liens in the same assets of the Debtor that that entity had prior to the filing of the chapter 11 bankruptcy case. In addition, the Debtor will provide the Lenders with information relating to projected revenues and expenses, actual revenue and expenses, and variances from the interim budget. This information will enable the Lenders to monitor the interests in the cash collateral. A copy of the motion is available at https://urlcurt.com/u?l=NeywKE from PacerMonitor.com. About Peace Equipment, LLC Peace Equipment, LLC is an active interstate freight carrier based out of Edcouch, Texas. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-70098) on May 24, 2023. In the petition signed by Alejandro G. Mascorro, president, the Debtor disclosed up t o $10 million in both assets and liabilities. Reese W. Baker, Esq., at Baker & Associates, represents the Debtor as legal counsel. PLATFORM II LAWNDALE: Wins Cash Collateral Access Thru June 1 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division, authorized Platform II Lawndale LLC to use cash collateral on an interim basis in accordance with the budget for the period from from May 11, 2023 through June 1, 2023. The Debtor requires the use of cash collateral to maintain and preserve its self-storage facility in Chicago's West Logan Square neighborhood through the payment of ordinary and necessary expenses related to the operation of the Debtor's property as well as specific extraordinary maintenance and repair expenses. GreenLake Real Estate Fund, LLC purports to hold a first priority lien and security interest in the Property, and the Debtor's cash and cash receipts received from the leasing of storage units through a security interest and assignment of rents granted by the Debtor under an Open-End Mortgage, Security Agreement, Assignment of Rents and Leases and Fixture Filing dated May 18, 2018, and recorded with the Cook County Recorder of Deeds on May 22, 2018. These assets secure the repayment of a promissory note dated May 18, 2018, in the original principal sum of $6.250 million. As adequate protection, Greenlake is granted a replacement lien on the Debtor's rents, accounts and accounts receivables. As further adequate protection for Greenlake's interests in the Pre-Petition Collateral, and consistent with 11 U.S.C. section 552, the Debtor will grant Greenlake, to the extent not heretofore granted, a replacement lien on the Debtor's rents, accounts, and accounts receivables derived from the Property, which are of the same type or nature as the Pre-Petition Collateral, coming into existence or acquired by the Debtor respecting the Property on or after the Petition Date. The Post-Petition Liens granted to Greenlake under the terms of the Order will be valid and perfected as of the date of the Order, without the need for the execution or filing of any further document or instrument otherwise required to be executed or filed under applicable non-bankruptcy law. The Debtor's authority to use Cash Collateral will terminate on the earlier of (a) the date of entry by the Court of an order modifying or otherwise altering the effectiveness of the Order, (b) an Event of Default, or (c) the expiration of the Budget Period. These events constitute an Event of Default: a. The entry of an order converting the Debtor's Chapter 11 case to a case under Chapter 7 of the Bankruptcy Code, which order is not stayed within 10 days of the entry of such order; b. The entry of an order dismissing the Debtor's Chapter 11 case, which is not stayed within 10 days of the entry of such order; and c. The Debtor's failure to comply with any provision of the Order. A copy of the Court's order is available at https://urlcurt.com/u?l=4IUZpO from PacerMonitor.com. The Debtor projects $32,200 in total operating revenue and $49,500 in total expenses for May 2023. About Platform II Lawndale LLC Platform II Lawndale LLC is an Illinois limited liability company that owns a self-storage facility at 1750 North Lawndale Avenue in Chicago's West Logan Square neighborhood. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 22-07668) on July 11, 2022. In the petition signed by Scott Krone, manager, the Debtor disclosed up to $50 million in both assets and liabilities. Judge Deborah L. Thorne oversees the case. Gregory J. Jordan, Esq., at Jordan & Zito LLC is the Debtor's counsel. POLERCOASTER LLC: Says Royalty Payments to Satisfy Unsecured Claims ------------------------------------------------------------------- Polercoaster, LLC and US Thrillrides, LLC submitted a First Amended Joint Plan of Reorganization. In exchange for Polercoaster agreeing to provide services and granting WF Coaster a license to utilize the Polercoaster IP, WF Coaster agreed to pay Polercoaster construction consulting fees in connection with the Orlando agreement, territory fees (in connection with Las Vegas and Atlantic City), and royalty payments for all three agreements. The construction consulting fees on the Orlando project become due upon issuance of the applicable governmental permit to commence construction, which has not yet occurred. The construction consulting fees are either $2.3 or $2.8 million (depending on the design specification chosen), payable in 24 equal monthly installments (the "Construction Consulting Fees"). On June 1, 2019, the parties amended the Polercoaster License Agreements in 2019 by, among other things, entering into stand-alone Royalty Agreements with respect to each of the three License Agreements. Each of the Royalty Agreements requires WF Coaster to pay a monthly royalty to Polercoaster commencing on the first day of the month following the opening of the Polercoaster ride to the public, with payment amounts increasing incrementally each month thereafter until the sixth month after opening of the ride. Payments start at $50,000 and increase to $100,000 per month by the sixth month and thereafter under the Orlando and Las Vegas Royalty Agreements, and they start at $25,000 and increase up to $50,000 under the Atlantic City agreement. Royalty payments continue monthly for a period of 20 years after the date of opening to the public of each Polercoaster ride. Under the Plan, Class 1 consists of all Allowed General Unsecured Claims against USTR, consisting of International Amusements' Claim No. 2-1 in the amount of $558,751.27 based on the Arbitration Award, and the claim of SBA in the amount of $150,000. Class 2 consists of all Allowed General Unsecured Claims against Polercoaster, consisting of International Amusements' Claim No. 2-1 in the amount of $558,751.27 based on the Arbitration Award, and the claim of SBA in the amount of $150,000. In full satisfaction of their Allowed Classes 1 and 2 General Unsecured Claims, Holders of Classes 1 and 2 Claims shall receive annual pro rata distributions of the Debtors' Disposable Income over a term of 4 years from the Effective Date, after Administrative Claims and Priority Claims are satisfied in full. In addition to the receipt of Debtor's Disposable Income, Classes 1 and 2 Claimholders shall receive a pro rata share of the net proceeds recovered from all Causes of Action after payment of professional fees and costs associated with such collection efforts, and after Administrative Claims and Priority Claims are paid in full. The maximum Distribution to Classes 1 and 2 Claimholders shall be equal to the total amount of all Allowed Classes 1 and 2 General Unsecured Claims. Classes 1 and 2 are impaired. The Debtors anticipate that the royalty payments due to Polercoaster shall be sufficient to satisfy all Classes 1 and 2 Claims in full by the end of the Plan term. The Plan contemplates the Debtors will continue to manage and operate their businesses in the ordinary course, but with restructured debt obligations. It is anticipated that the Debtors' continued operations will be sufficient to make the Plan Payments. Specifically, the Debtors anticipate that WF Coaster will begin construction of the Orlando and Las Vegas rides in the next two years and will then start making monthly Construction Consulting Fee payments, and will either (i) will buy out the Royalty Agreements through payment of a lump sum payment of millions of dollars, or (ii) pay the royalty payments due under the Royalty Agreements upon opening of a ride to the public. Either way, the amounts Debtors anticipate receiving from WF Coaster during the Plan term are more than enough to pay all Class 1 and Class 2 Claims in full. Because neither Debtor will have any meaningful operating expenses going forward, nearly 100% of all payments received during the Plan term will be distributed to the Holders of Class 1 and 2 Claims until such claims are paid in full. Funds generated from the Debtors' operations through the Effective Date will be used for Plan Payments; however, the Debtor's cash on hand as of Confirmation will be available for payment of Administrative Expenses. Attorneys for the Debtors: Christopher R. Thompson, Esq. Kelsey E. Burgess, Esq. BURR & FORMAN LLP 200 S. Orange Avenue, Suite 800 Orlando, FL 32801 Tel: (407) 540-6600 Fax: (407) 540-6601 E-mail: crthompson@burr.com mlucca-cruz@burr.com kburgess@burr.com A copy of the Disclosure Statement dated May 17, 2023, is available at bit.ly/3pSN58I from PacerMonitor.com. About Polercoaster LLC William "Bill" Kitchen is the founder and President of Polercoaster, LLC, and US ThrillRides, LLC. Mr. Kitchen has been an inventor and creator in the amusement ride industry for nearly 40 years. Kitchen developed and held all of the intellectual property rights and proprietary information related to the amusement attraction known as the "Polercoaster," which he developed over thirteen years ago in the late 2000s. The Polercoaster ride is a roller coaster that is supported or suspended from a vertical tower instead of moving along a horizontal track. The loops, dips, twists, and other aspects of a great coaster experience are achieved using the same length of track, but in a very small footprint. US ThrillRides, LLC, and Polercoaster, LLC, sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-04495 and 22-04496) on Dec. 21, 2022, with up to $50,000 in assets and $500,001 to $1 million in liabilities. Justin M. Luna, Esq., at Latham, Luna, Eden & Beaudine, LLP and Morgan & Morgan, P.A. serve as the Debtors' legal counsels. PURDUE PHARMA: To Proceed Sale of Avrio Health Unit --------------------------------------------------- Alex Wolf of Bloomberg Law reports that Purdue Pharma LP will proceed to sell its consumer drug unit Avrio Health LP for $397 million in a bankruptcy sale to Atlantis Consumer Healthcare, after no other qualified bids emerged for a planned auction. Atlantis, which submitted the stalking horse bid, will buy Avrio's four principal over-the-counter medications, Purdue said in a Tuesday filing with the US Bankruptcy Court for the Southern District of New York. Atlantis is a subsidiary of Arcadia Consumer Healthcare Inc., which operates a number of consumer brands, including Nizoral shampoos and stomach pain reliever Kaopectate. About Purdue Pharma LP Purdue Pharma L.P. and its subsidiaries -- http://www.purduepharma.com/-- develop and provide prescription medicines and consumer products that meet the evolving needs of healthcare professionals, patients, consumers and caregivers. Purdue's subsidiaries include Adlon Therapeutics L.P., focused on treatment for Attention-Deficit/Hyperactivity Disorder (ADHD) and related disorders; Avrio Health L.P., a consumer health products company that champions an improved quality of life for people in the United States through the reimagining of innovative product solutions; Imbrium Therapeutics L.P., established to further advance the emerging portfolio and develop the pipeline in the areas of CNS, non-opioid pain medicines, and select oncology through internal research, strategic collaborations and partnerships; and Greenfield Bioventures L.P., an investment vehicle focused on value-inflection in early stages of clinical development. Opioid makers in the U.S. are facing pressure from a crackdown on the addictive drug in the wake of the opioid crisis and as state attorneys general file lawsuits against manufacturers. More than 2,000 states, counties, municipalities and Native American governments have sued Purdue Pharma and other pharmaceutical companies for their role in the opioid crisis in the U.S., which has contributed to the more than 700,000 drug overdose deaths in the U.S. since 1999. OxyContin, Purdue Pharma's most prominent pain medication, has been the target of over 2,600 civil actions pending in various state and federal courts and other fora across the United States and its territories. On Sept. 15 and 16, 2019, Purdue Pharma L.P. and 23 affiliated debtors each filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 19-23649), after reaching terms of a preliminary agreement for settling the massive opioid litigation. The Debtors' consolidated balance sheet as of Aug. 31, 2019, showed $1.972 billion in assets and $562 million in liabilities. U.S. Bankruptcy Judge Robert Drain oversees the cases. The Debtors tapped Davis Polk & Wardwell, LLP and Dechert, LLP, as legal counsels; PJT Partners as investment banker; AlixPartners as financial advisor; and Grant Thornton, LLP as tax structuring consultant. Prime Clerk, LLC, is the claims agent. Akin Gump Strauss Hauer & Feld LLP and Bayard, P.A., represent the official committee of unsecured creditors appointed in the Debtors' bankruptcy cases. David M. Klauder, Esq., is the fee examiner appointed in the Debtors' cases. The fee examiner is represented by Bielli & Klauder, LLC. * * * U.S. Bankruptcy Judge Robert Drain in early September 2021 approved a plan to turn Purdue into a new company (Knoa Pharma LLC) no longer owned by members of the Sackler family, with its profits going to fight the opioid epidemic. The Sackler family agreed to pay $4.3 billion over nine years to the states and private plaintiffs and in exchange for a lifetime legal immunity. The deal resolves some 3,000 lawsuits filed by state and local governments, Native American tribes, unions, hospitals and others who claimed the company's marketing of prescription opioids helped spark and continue an overdose epidemic. Separate appeals to approval of the Plan have already been filed by the U.S. Bankruptcy Trustee, California, Connecticut, the District of Columbia, Maryland, Rhode Island and Washington state, plus some Canadian local governments and other Canadian entities. In early March 2022, Purdue Pharma reached a nationwide settlement over its role in the opioid crisis, with the Sackler family members boosting their cash contribution to as much as $6 billion. The settlement was hammered out with attorneys general from the eight states -- California, Connecticut, Delaware, Maryland, Oregon, Rhode Island, Vermont and Washington -- and D.C. who had opposed the previous settlement. QUALITY HEATING: Wins Cash Collateral Access Thru June 8 -------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized Quality Heating and Air Conditioning Company, Inc. to use cash collateral, on an interim basis, in accordance with the budget, through June 8, 2023. The Debtor acknowledges and agrees that as of the Petition Date, the claims and liens of Wilmington Savings Fund Society, FSB: (a) were valid, binding, enforceable, non-avoidable, and properly perfected and were granted to, or for the benefit of, Wilmington Savings Fund for fair consideration and reasonably equivalent value; (b) were senior in priority over any and all other liens on its prepetition collateral; (c) were enforceable in accordance with the terms of the prepetition loan documents; and (d) constitute allowed, secured claims within the meaning of 11 U.S.C sections 502 and 506. As adequate protection, Wilmington Savings Fund is granted adequate protection, replacement security interests in and replacement liens in post-petition assets acquired using the cash collateral to the same extent and priority as existed pre-petition in accordance with 11 U.S.C. section 361. The replacement liens and security interests granted to Wilmington Savings Fund are automatically deemed perfected upon entry of the Order without the necessity of the lender taking possession, filing financing statements, mortgages or other documents. As further adequate protection, the Debtor will make regular monthly payments to Wilmington Savings Fund as required under the loan documents, in the amounts set forth in the regular monthly statements issued by the lender with the initial payments to be made on or before April 3, 2023 and the Debtor will pay, in addition thereto, $100,000 from the unencumbered proceeds to be paid to the Debtor by Joseph M. Zimmer, Inc., which Wilmington Savings Fund will apply to the balance of the obligations owed to the lender, including reasonable postpetition legal fees and expenses. The Small Business Administration is granted, as assurance of adequate protection, replacement liens in postpetition assets to the same extent and priority as existed pre-petition in accordance with 11 U.S.C. section 361. A further hearing on the matter is set for June 9 at 9 a.m. A copy of the Court's order is available at https://urlcurt.com/u?l=LoqKbi from Epiq Corporate Restructuring, LLC, the claims agent. About Quality Heating and Air Conditioning Headquartered in Newport, Delaware, Quality Heating and Air Conditioning provides HVAC and sheet metal services across the Delaware, Maryland, Pennsylvania, New Jersey and Virginia areas. Quality Heating specializes in the construction and commercial industries and was founded over 50 years ago. It is capable of all phases of sheet metal work and has worked on an extensive variety of projects including new construction, industrial, pharmaceutical, medical, educational, remodels and design-build. It has over 40,000 square feet of space dedicated to custom fabrication. Quality Heating sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 23-10354) on March 27, 2023. In the petition signed by Horace Adam Wahl, III, president, the Debtor disclosed up to $50 million in both assets and liabilities. Judg Karen B. Owens oversees the case. The Debtor tapped Gellert Scali Busenkell & Brown, LLC as legal counsel and SC&H Group, Inc. as investment banker. Epiq Corporate Restructuring, LLC is the claims and noticing agent. The U.S. Trustee for Region 3 appointed an official committee to represent unsecured creditors in the Debtor's Chapter 11 case. The committee is represented by Morris James, LLP. QUALTEK LLC: S&P Downgrades ICR to 'D' Following Chapter 11 Filing ------------------------------------------------------------------ S&P Global Ratings lowered its issuer credit rating on U.S.-based infrastructure services provider QualTek Services Inc. to 'D' from 'SD' (selective default). S&P's issue-level rating on its $380 million secured term loan remains at 'D'. The downgrade follows QualTek's filling for a Chapter 11 petition under the U.S. Bankruptcy Code on May 24, 2023. Qualtek announced a prepackaged restructuring transaction that will reduce outstanding debt by about $312 million and provide $65 million of additional liquidity. QualTek's prepetition capital structure includes approximately $625.3 million in outstanding debt consisting of $418.3 million in secured term loans, $131.1 million in convertible notes, and $75.7 million in an asset-based revolving credit facility. Qualtek expects support of at least 85% of secured debt holders and approximately 80% of its convertible noteholders. Upon emergence from Chapter 11, the company will have a new ownership structure comprised of the company's existing lenders and management team. S&P will reassess its ratings on QualTek upon emergence from Chapter 11. ESG credit indicators: E-2, S-2, G-3 RAW INDULGENCE: Files for Chapter 11 Bankruptcy Protection ---------------------------------------------------------- Bill Heltzel of Westchester and Fairfield County Business Journal reports that Elmsford 'Raw Rev' snack bar business, Raw Indulgence, is seeking bankruptcy protection. Raw Indulgence Ltd. filed a Chapter 11 reorganization petition in U.S. Bankruptcy Court, White Plains, declaring $708,413 in assets and nearly $3.9 million in liabilities. During divorce proceedings with her ex-husband and business partner, CEO Alice Benedetto stated in a court filing, "little to no sales activity occurred, which caused the debtor to lose considerable market share." "Additionally, three to four new competitors were able to enter the market in a category that the debtor once thrived in and pioneered." Last 2022, the company booked income of $5,432,725, according to the petition. Through early May it had booked $1,477,591. Raw Indulgence was founded in 2004 to sell snacks created by Benedetto. Initially, according to court records, it made brownies with fruits, nuts, seeds and maple syrup and sold them to health food stores. As the snacks became more popular, they were sold in stores like Wegmans and Whole Foods. Then Benedetto created a vegan protein bar that was sold by independent chain stores, Amazon and on its own website. But as her marriage foundered, so did the business. Benedetto and her husband had been able to work together and make business decisions, according to a 2021 lawsuit she filed seeking to dissolve the corporation. But after he filed for divorce in 2017 they were unable to agree on critical business decisions. In 2019, a consultant was appointed to help resolve their stalemate, but still, according to the 2021 lawsuit, they "remained at constant impasse on all the necessary decisions relating to the future of Raw's business." In 2020 they worked out a settlement requiring her husband to buy Benedetto's half of Raw Indulgence for $3.95 million. That deal fell through, and eventually she retained control of the business. Raw turned to the merchant cash advance (MCA) market, alternative lenders that quickly provide short-term loans but typically charge steep interest rates and fees. The company developed a sales plan to generate more monthly income to cover the payments, according to Benedetto. "Unfortunately, the cash flow was not sufficient to pay all of these MCAs," so Raw petitioned for reorganization. The list of unsecured creditors includes six MCA lenders with claims totaling $683,783. Each claim is characterized as disputed. Raw also shows a $2 million obligation to the U.S. Small Business Administration for an Economic Injury Disaster Loan. The company intends to use the bankruptcy process to restructure its debt and resolve various claims with vendors and lenders, Benedetto said. It will support a reorganization plan with funds from ongoing business and new financing. About Raw Indulgence Raw Indulgence is a protein bar manufacturer in Elmsford, NY. Raw Indulgence sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 23-22350) on May 8, 2023. In the petition filed by Alice Benedetto, as chief executive officer, the Debtor reports total assets of $708,412 and total liabilities of $3,888,567. The case is overseen by Honorable Bankruptcy Judge Sean H. Lane. The Debtor is represented by: Robert L. Rattet, Esq. DAVIDOFF HUTCHER & CITRON LLP 605 Third Avenue 34th Floor New York, NY 10158 Tel: 212-557-7200 Fax: 212 286 1884 Email: rlr@dhclegal.com RAYONIER ADVANCED: Taps Goldman for Advice on Debt Refinancing -------------------------------------------------------------- Dayana Mustak of Bloomberg Law reports that Rayonier Advanced Materials Inc. has engaged Goldman Sachs Group Inc. for advice on a potential refinancing of junk bonds after shelving an offering earlier this 2023. Goldman is advising on the best structure for the refinancing of 5.5% unsecured notes due June 2024, including options for high-yield notes, syndicated loans, and privately placed loans, the company said on a recent earnings call. The company expects "acceptable terms" for refinancing, given "lower debt and improving credit metrics," Chief Financial Officer Marcus J Moeltner said on the call. About Rayonier Advanced Materials Rayonier Advanced Materials Inc. (RYAM), headquartered in Jacksonville, Florida, is a leading global producer of specialty cellulose pulp. The company has revenue of about $1.6 billion in LTM September 2022. RENNASENTIENT INC: Wins Interim Cash Collateral Access ------------------------------------------------------ The U.S. Bankruptcy Court for the Eastern District of North Carolina, Raleigh Division, authorized Rennasentient, Inc. to use cash collateral on an interim basis in accordance with the budget, with a 10% variance. The Debtor requires the use of cash collateral to pay its ordinary operating expenses and that such use is necessary to avoid irreparable harm to the Debtor's rehabilitation under the Bankruptcy Code. Wells Fargo Bank and the U.S. Small Business Administration assert an interest in the Debtor's cash collateral. Wells Fargo is owed $839,037 and the SBA $163.130. As adequate protection, the Secured Creditors are granted a lien in after-acquired revenue to the same extent and priority as they had prior to the filing of the case. Wells Fargo is entitled to additional adequate protection in the form of payment of $5,000 during the second interim period, to be delivered no later than June 7, 2023. The Debtor will remain current in the payment of all post-petition federal, state, and local tax liabilities, including but not limited to accruing ad valorem property taxes, sales taxes, payroll taxes and income taxes. A further hearing on the matter is set for June 13, 2023 at 10:30 a.m. A copy of the Court's order and the Debtor's budget is available at https://urlcurt.com/u?l=RFo0Wi from PacerMonitor.com. The Debtor projects $108,000 in revenue and $89,712 in total expenses for the period May 21 to June 20, 2023. About Rennasentient, Inc. Rennasentient, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D.N.C. Case No. 23-00485) on February 21, 2023. In the petition signed by Eric Webb, president, the Debtor disclosed up to $1 million in assets and up to $10 million in liabilities. Judge David M. Warren oversees the case. Philip M. Sasser, Esq., at Sasser Law Firm, represents the Debtor as legal counsel. RHP HOTEL: Fitch Assigns BB+ Rating on New Loans ------------------------------------------------ Fitch Ratings has assigned a final rating to RHP Hotel Properties, L.P.'s (RHP) new revolver and Term Loan B of 'BB+'/'RR1'. Fitch currently rates RHP and its operating partnership, RHP Hotel Properties, LP 'BB-'. The Rating Outlook is Stable. The final ratings are in line with the debt issues' expected ratings that Fitch assigned on May 4, 2023 (see "Fitch Rates Ryman Hospitality's New Secured Facility 'BB+(EXP)'/'RR1'"). KEY RATING DRIVERS Solid Balance Sheet Management: Fitch forecasts RHP will maintain net leverage metrics appropriate for the 'BB-' rating despite macroeconomic headwinds in 2H23 into 2024 thanks to solid forward-booking trends and favorable contracted group bookings. Fitch expects net leverage to be 4.2x by YE23, which is in line with the company's policy of 4x-4.5x. RHP has meaningful headroom to manage a more material economic downturn as demonstrated by its performance during the Global Financial Crisis when it experienced only mid-teen declines in EBITDA and slight margin erosion. As compared to peers, RHP has greater visibility into future cash flows and protection from cancellation and attrition fees, which Fitch views favorably. The solid liquidity position is supported by the company's commitment to improve its financial profile by working to unencumber its asset pool. In the most recent refinancing activity the facility was only encumbered by the equity pledges in two assets. Strong Rebound Post-Pandemic: RHP's operations have outperformed Fitch's prior expectations, which should continue into 1H23 as group travel demand continues to gain momentum. Fitch anticipates rate growth to retract in FY24 in response to a pullback in discretionary travel due to recessionary and inflationary concerns. However, Fitch expects occupancy to continue to improve through the forecast period as group travel demand begins to return as evidenced by recent and forward booking trends. RHP went into 2023 with approximately 50 points of occupancy on the books, in line with pre-pandemic trends and suggests substantial improvement to normalized occupancy levels while maintaining rate. High-Quality, Differentiated Portfolio: RHP owns a high-quality, concentrated portfolio of five specialized hotels with strong competitive positions in the large group destination resort market. The company's smallest hotel has 1,500 rooms, and each of its five properties ranks within the 10 largest U.S. hotels as measured by exhibit and meeting space square footage. RHP's portfolio also has the highest space-to-rooms ratio in the segment. Groups comprise roughly 70% of hospitality revenues, which are in multi-year advance booking windows. High capital costs and long lead times provide some barriers to new supply in RHP's niche property type. Volatile Cash Flows: Hotel industry cyclicality is a key credit concern. Hotels re-price their inventory daily, resulting in the shortest lease terms and least stable cash flows within commercial real estate. Economic cycles and exogenous events (e.g. acts of terrorism) have historically caused or exacerbated industry downturns. The average large group bookings window is over two years, which provides RHP with better revenue visibility than most hotel REITs. Longer lead times can cause group demand to lag that of the overall industry, which can buffer cash flows during downturns and delay them during recoveries. RHP's Entertainment segment (a small but growing share of segment EBITDA) provides some additional cash flow diversification and stability. The segment includes unique, valuable entertainment content stemming from the Grand Ole Opry's nearly 100 years of history, as well as other branded entertainment and/or F&B assets. Strategic Growth Opportunities: Fitch believes RHP's M&A strategy, including the Block 21 acquisition and Atarios partnership, is well suited to its existing portfolio with synergy potential. Block 21 expands RHP's portfolio presence to Austin, TX where the complex spans an entire city block. It includes the 2,750-seat ACL Live at the Moody Theater, 251-room W Austin hotel, 3TEN at ACL Live club and about 53,000 square feet of other class A commercial space. The Atairos partnership provides an opportunity to further grow the entertainment segment as well as a path for future spinoffs. Initiatives undertaken through both transactions should largely take effect in 2023 and beyond, supplementing post-pandemic recovery growth. Fitch expects any future spin-off of the entertainment segment to be managed within the context of RHP's stated financial policies, as the loss of EBITDA could be offset by debt paydown with received proceeds. Parent Subsidiary Linkage: Fitch rates the IDRs of the parent REIT and subsidiary operating partnership on a consolidated basis, using the weak parent/strong subsidiary approach under its Parent and Subsidiary Linkage Criteria. Open access and control factors are strong, based on the entities operating as a single enterprise with strong legal and operational ties. For Aurora, Fitch applies the strong parent/weak subsidiary approach, and its ratings are equalized with the parent's. Fitch views legal incentives as medium given the existence of certain completion guarantees and RHP's 10% principal guarantee. Fitch views strategic and operational incentives as high given the asset's high quality, potential for growth, and common branding and management. DERIVATION SUMMARY RHP is more concentrated by assets, geography and chainscale (i.e. hotel quality) than its peer Host Hotels & Resorts (BBB-/ Positive). Additionally, RHP's focus on the large group segment differentiates it from its peers. While RHP's entertainment assets generate a small (but growing) portion of its overall EBITDA, Fitch views the diversification as a credit positive. RHP's high portfolio concentration by assets, markets, price/amenity level, brand and property manager are consistent with speculative grade ratings. RHP has demonstrated access to common equity, private placement unsecured bonds and bank debt, secured debt, and joint ventures. However, Fitch believes the company's access to many of these capital avenues is relatively weaker than more established REIT issuers that own portfolios with more stable, longer lease duration property types in core urban markets generally favored by institutional equity investors and lenders. KEY ASSUMPTIONS - Occupancy increases of 2% in 2024, 4% in 2025 and 2% in 2026 (occupancy 68% in 2023, 70% in 2024, in 71% in 2025 and 73% in 2026); - ADR declines of -11% in 2024, -3% in 2025 and -1% in 2026; - EBITDA margins of 30%-31% through the forecast period; - Annual capex of 8% through the forecast period; - Fitch assumes normalized dividends beginning in 2023 with annual dividend/share growth of 2% thereafter. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Fitch's expectation and public commitment for net leverage to remain below 4.0x; - Greater portfolio diversification by market, asset, brand and manager; - Sustained improvement in EBITDA margin Factors that could, individually or collectively, lead to negative rating action/downgrade: - Fitch's expectation for net leverage to sustain above 5.0x; - Entertainment spinoff resulting in lower EBITDA and thus elevated leverage; - Prolonged retraction of corporate travel demand in impending recessionary environment; - Slower than expected return from Block 21. LIQUIDITY AND DEBT STRUCTURE Ample Liquidity: As of Dec. 31, 2022, Ryman had $334 million in unrestricted cash and $755 million available capacity under its corporate and OEG credit facilities net of $10 million outstanding in letters of credit. The next major maturity is in 2023, with the $800 million Gaylord Rockies term loan coming due. This term loan has three one-year extension options, which Fitch expects to be exercised, effectively pushing out the maturity. Ryman has exceptional liquidity proforma for the refinance as there are no maturities until 2026 when the Block 21 CMBS loan comes due. The new $700 million revolving credit facility and $500 million Term Loan B effectively push out maturities until 2027 and 2030 respectively. The facility and Term Loan B are secured by first priority equity pledges on two borrowing base assets the Gaylords Opryland and Gaylord Texan. The facility was previously secured by interests in four properties, thereby unencumbering the portfolio upon refinancing. ISSUER PROFILE RHP is a lodging and hospitality REIT specializing in upscale convention center resorts and country music entertainment experiences. It owns five of the top 10 largest non-gaming convention center hotels in the U.S. under the Gaylord Hotels brand and managed by Marriott International. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- RHP Hotel Properties, L.P. senior secured LT BB+ New Rating RR1 BB+(EXP) ROBBINS SERVICE: Court OKs Cash Collateral Access Thru June 13 -------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of North Carolina, Shelby Division, authorized Robbins Service Group, LLC to use cash collateral on an interim basis in accordance with the budget, with a 10% variance, through June 13, 2023. As previously reported by the Troubled Company Reporter, on July 31, 2020, the Debtor entered into a Loan Agreement, Note, and Security Agreement related to a Small Business Administration loan. The amount borrowed was $639,400, and the lender was Aquesta Bank. The SBA Loan matures in 2030 and requires payments of $6,939 monthly, which constitutes payment of principal and interest. The interest rate on the loan is the Prime Rate plus 2.25%. The Security Agreement executed in conjunction with the Loan Agreement and Note purports to give Aquesta Bank a security interest in accounts receivable, instruments, chattel paper, contract rights, and general intangibles, among other collateral. On July 28, 2020, Aquesta Bank filed its UCC Financing Statement with the North Carolina Secretary of State, asserting a blanket lien on all of the Debtor's assets. Aquesta Bank is a predecessor in interest to United Community Bank such that UCB is the current holder of the SBA loan. As of the Petition Date, the Debtor believes the total amount owed to UCB is $508,314. The Debtor entered into certain agreements and arrangements with merchant cash advance lenders: -- EBF Holdings, LLC, doing business as Everest Business Funding on Sept. 13, 2022; -- White Road Capital LLC, Series: 144665, doing business as GFE Holdings on October 18, 2022; -- Global Merchant Cash Inc. doing business as Wall Street Funding on or about May 19, 2022; -- Kalamata Capital Group, LLC, on August 19, 2022; and -- Green Grass Capital on January 26, 2023. The Debtor believes that, to the extent UCB holds valid, perfected liens in all of the Debtor's assets, UCB has ample equity cushion. The Debtor believes its assets have a value of $1,440,496 as shown on its balance sheet through March 31, 2023. UCB's debt is $508,314, therefore, the Debtor believes that UCB has an equity cushion in excess of $900,000 with respect to any valid lien. A copy of the Court's order and the Debtor's budget is available at https://urlcurt.com/u?l=WwTC8f from PacerMonitor.com. The Debtor projects $145,250 in gross profit and $137,625 in total operating expenses for the period from May 15 to June 16, 2023. About Robbins Service Group, LLC Robbins Service Group, LLC is a North Carolina limited liability company that operates a landscaping business doing business as Whispering Pines Landscaping. Robbins' services generally include landscape design, installation, and maintenance. Robbins' geographic focus is primarily the Lake Norman area. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D.N.C. Case No. 23-40082) on May 15, 2023. In the petition signed by Michael A. Robbins, president and CEO, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Craig Whitley oversees the case. Matthew L. Tomsic, Esq., at Rayburn Cooper & Durham, P.A., represents the Debtor as legal counsel. ROLLIN DIRTY: Seeks Cash Collateral Access Thru Nov 30 ------------------------------------------------------ Rollin Dirty LLC asks the U.S. Bankruptcy Court for the District of Oregon for authority to use cash collateral through November 30, 2023, and grant a replacement lien. The Debtor requires the use of cash collateral to continue to operate its business. The secured creditors have UCC liens filed on bank accounts and accounts receivable recorded in the Office of The Secretary of the State. They are dated November 1, 2022 and November 11, 2022. There is a third UCC filing dated September 12, 2022 that could be for one of the secured creditors. The apparent secured creditors are Vader Servicing, LLC dba Vader Mountain Capital dated August 19, 2022 in the approximate amount of $15,776 and Waterview Capital, LLC dated September 28, 2022 in the approximate amount of $6,135. As of the bankruptcy filing date, the Debtor only had $10 in their bank account and $0 of account receivables so the majority of this debt is unsecured. The bank accounts and accounts receivable total approximately $10.43 as of the day of filing. As and for adequate protection pursuant to 11 U.S.C. sections 361, 363, and 364, the Secured Creditors will be granted a security interest and replacement lien, dollar for dollar, in all of the post-petition accounts and accounts receivables to replace their security interest and liens in collateral to the extent of pre-petition cash collateral utilized by Debtor during the pendency of this bankruptcy proceeding. A hearing on the matter is set for June 1, 2023 at 2:30 p.m. A copy of the motion is available at https://urlcurt.com/u?l=Svmlxb from PacerMonitor.com. The Debtor projects total expenses, on a monthly basis, as follows: $22,225 for May 2023; $22,225 for June 2023; $22,225 for July 2023; $22,225 for August 2023; $22,225 for September 2023; and $22,225 for October 2023. About Rollin Dirty LLC Rollin Dirty LLC operates a log hauling business. The Debtor sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Ore. Case No. 23-31150-thp11) on May 23, 2023. In the petition signed by Wilbur Manard Sims III, president, the Debtor disclosed up to $500,000 in assets and up to $1 million in liabilities. Ted A. Troutman, Esq., at Troutman Law Firm P.C., represents the Debtor as legal counsel. RYDER SYSTEM: Egan-Jones Retains BB+ Senior Unsecured Ratings ------------------------------------------------------------- Egan-Jones Ratings Company on May 11, 2023, maintained its 'BB+' foreign currency and local currency senior unsecured ratings on debt issued by Ryder System, Inc. Headquartered in Miami, Florida, Ryder System, Inc. provides a continuum of logistics, supply chain, and transportation management solutions worldwide. SAM'S PLACE: Court OKs Cash Collateral Access Thru July 28 ---------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Pennsylvania authorized Sam's Place Lottery & Tobacco, Inc. to use cash collateral on an interim basis in accordance with the budget, through July 28, 2023. The Court said the Small Business Administration, Newtek Small Business Finance, LLC, BayFirst National Bank and Liberty Capital Management are granted replacement liens in the Debtor's post-Petition cash collateral consisting of inventory and cash, as appropriate, and, only to the extent that each such Lender has a pre-Petition lien in cash collateral. All liens granted to the Lenders, as appropriate, will be in such priority as exists pre-Petition. Further the Lenders, as appropriate, will have administrative claims to the extent that the post-Petition Collateral proves insufficient to replace the diminution in cash collateral, with such administrative claims, having priority over all administrative claims, except those of fees owed to professionals in the case, the Subchapter V Trustee and to the Office of the U.S. Trustee, if any. A final hearing on the matter is set for July 25 at 10:30 a.m. A copy of the motion is available at https://urlcurt.com/u?l=4MViq3 from PacerMonitor.com. About Sam's Place Lottery & Tobacco, Inc. Sam's Place Lottery & Tobacco, Inc. is engaged in the operation of retail tobacco, lottery and convenience stores. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Pa. Case No. 23-00874) on April 20, 2023. In the petition signed by Michael A. Somers, its president, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Henry W. Van Eck oversees the case. Robert E. Chernicoff, Esq., at Cunningham, Chernicoff and Warshawsky PC, represents the Debtor as legal counsel. SEMRAD LAW: Court OKs Interim Cash Collateral Access ---------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized Semrad Law Firm, LLC to use cash collateral on a final basis in accordance with the budget, with a 20% variance. The Debtor requires the use of cash collateral to fund working capital requirements and operating and administrative expenses of the Debtor on a final basis. As of the Petition Date, the Debtor has approximately $3 million in the aggregate principal amount of outstanding secured debt obligations, including capitalized interest, arising under certain agreements with its prepetition lender, Old National Bank. Additionally, the Debtor has approximately $3.205 million in the aggregate principal amount of unsecured debt obligations. As adequate protection, the Prepetition Secured Lender is granted additional and replacement valid, binding, enforceable, non-avoidable, and perfected postpetition security interests and liens upon all present and after-acquired property and assets. Notwithstanding the provision of Adequate Protection, the Prepetition Secured Lender is granted an allowed administrative expense claim pursuant to 11 U.S.C. section 507(b) with super-priority over all other administrative expenses and all other claims against the Debtors or their estates of any kind or nature whatsoever, but in all cases subject and subordinate to the Carve-Out and the Permitted Prior Liens. These events constitute an "Event of Default": (a) The conversion of the Chapter 11 Case to a case under chapter 7 of the Bankruptcy Code; (b) The dismissal of the Chapter 11 Case; (c) Filing of a motion, application or other pleading to obtain postpetition financing that has not been consented to by the Prepetition Secured Lender; (d) Entry of an order or a judgment by the Court or any other court staying, reversing, vacating, amending, rescinding or otherwise modifying any of the terms of this Final Order, or filing of a motion, application or other pleading by the Debtor seeking such entry, in each case without the consent of the Prepetition Secured Lender; or (e) A final determination by the Court that a material violation or breach (other than by the Prepetition Secured Lender), of any of the provisions of the Final Order has occurred. A copy of the order is available at https://urlcurt.com/u?l=q5FaRj from PacerMonitor.com. About Semrad Law Firm, LLC Semrad Law Firm, LLC is a debt relief agency, a bankruptcy law firm offering legal relief to families struggling with debt. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 23-10512) on April 26, 2023. In the petition signed by Patrick Semrad, manager, the Debtor disclosed $8,267,344 in assets and $7,809,414 in liabilities. Judge John T. Dorsey oversees the case. Joseph C. Barsalona II, Esq., at Pashman Stein Walder Hayden, PC, represents the Debtor as legal counsel. SERTA SIMMONS: Settles Debt Blacklisting Dispute With Apollo ------------------------------------------------------------ Amelia Pollard and Jeremy Hill of Bloomberg News report that Apollo Global Management Inc. has settled a bitter dispute with Serta Simmons Bedding LLC over whether the investing giant was previously barred from buying the now-bankrupt mattress seller's debt, but did so anyway. Under a deal announced Wednesday, Apollo will be allowed to retain half of the roughly $181 million in Serta term loan debt that the money manager says it owns. The other half of the trades will not close, Serta attorney Ray Schrock said in a bankruptcy hearing Wednesday, May 17, 2023. About Serta Simmons Bedding Serta Simmons Bedding, together with its non-debtor affiliates, are manufacturers and marketers of bedding products in North America, operating various bedding manufacturing facilities across the United States and Canada. Serta Simmons Bedding, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 23-90020) on Jan. 23, 2023. The petitions were signed by John Linker, chief financial officer, treasurer and assistant secretary. At the time of filing, the Debtors estimated $1 billion to $10 billion in both assets and liabilities. Serta Simmons tapped Weil, Gotshal & Manges as counsel, Evercore Group, LLC, as its investment banker, and FTI Consulting, Inc., as its financial advisor. Epiq Corporate Restructuring, LLC, is the claims and noticing agent. Pricewaterhousecoopers LLP is the tax services advisor. SILICON VALLEY BANK: Ex-CEO Becker Declines to Give Up Pay ---------------------------------------------------------- Allyson Versprille of Bloomberg News reports that the former Silicon Valley Bank executive who's taken the brunt of criticism for the lender's collapse is refusing to commit to giving up any of the $10 million he received annually from the failed lender. Former SVB Chief Executive Officer Greg Becker told lawmakers on the Senate Banking Committee on Tuesday, May 16, 2023, that unprecedented events, interest-rate hikes and negative social media coverage rather than mismanagement were the root causes of the firm’s March demise. Mr. Becker said he'd work with regulators to review compensation, but wouldn't pledge to give anything back despite being pressed repeatedly to do so. About Silicon Valley Bank Silicon Valley Bank was the nation's 16th largest bank and the biggest to fail since the 2008 financial meltdown. During the week of March 6, 2023, Silicon Valley Bank, Santa Clara, CA, experienced a severe "run-on-the-bank." On the morning of March 10, 2023, the California Department of Financial Protection and Innovation seized SVB and placed it under the receivership of the Federal Deposit Insurance Corporation (FDIC). The FDIC on March 13, 2023, disclosed that it transferred all deposits -- both insured and uninsured -- and substantially all assets of the former Silicon Valley Bank of Santa Clara, California, to a newly created, full-service FDIC-operated "bridge bank" in an action designed to protect all depositors of Silicon Valley Bank. SVB Financial Group is a financial services company focusing on the innovation economy, offering financial products and services to clients across the United States and in key international markets. Prior to March 10, 2023, SVB Financial Group owned and operated Silicon Valley Bank, a state-chartered bank. On March 17, 2023, SVB Financial Group sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 23-10367). The Hon. Martin Glenn is the bankruptcy judge. The Debtor had assets of $19,679,000,000 and liabilities of $3,675,000,000 as of Dec. 31, 2022. Centerview Partners LLC is proposed financial advisor, Sullivan & Cromwell LLP proposed legal counsel and Alvarez & Marsal proposed restructuring advisor to SVB Financial Group as debtor-in-possession. Kroll is the claims agent. STAGE LIGHTING: Court OKs Interim Cash Collateral Access -------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida, Jacksonville Division, authorized Stage Lighting Store, LLC to use cash collateral on an interim basis in accordance with the budget. The Debtor is permitted to use cash collateral to pay: (a) amounts expressly authorized by the Court, including payments to the SubChapter V Trustee; (b) the "bare necessities" for day-to-day operations; (c) prepetition wages to employees who are retained by the Debtor moving forward; and (d) additional amounts as may be expressly approved in writing by Fox Capital Group Inc. and Small Business Administration. As previously reported by the Troubled Company Reporter, the Debtor operates five Vystar business accounts (3 checking and 2 savings) and one Chase business account. The Debtor generates cash on a point-of-sale basis. Revenues and receivables are constantly being deposited in the Debtor's operating accounts. To ensure monies would not be offset by Vystar upon filing, the Debtor has on hand $24,000 in cash. The Debtor has $2,261 in its Chase account and $571 spread across its Vystar accounts. The Debtor believes Fox Capital Group Inc. may allege an interest in cash collateral as it has levied on the Debtor's bank account. The collateral securing payment to Fox has a value of around $26,832. The Court said each creditor with a security interest in cash collateral 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 document 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 the loan and security documents with the Secured Creditors. As adequate protection, the Debtor will pay Fox Capital Group Inc. 8% of monthly gross revenues of the Debtor during the pendency of the case until Fox is paid in full. The Debtor will pay the Small Business Administration adequate protection payments of $400 per month starting June 15, 2023. A continued hearing on the matter is set for July 5 at 9 a.m. A copy of the order is available at https://urlcurt.com/u?l=t6GVlN from PacerMonitor.com. About Stage Lighting Store, LLC Stage Lighting Store, LLC is a stage lighting equipment supplier for school play, professional production, event venue, and church service needs. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-01061) on May 11, 2023. In the petition signed by Russell Behrens, owner, the Debtor disclosed $226,028 in assets and $1,395,986 in liabilities. Judge Jason A. Burgess oversees the case. Donald M. DuFresne, Esq., at Parker & Dufresne, P.A., represents the Debtor as legal counsel. STERICYCLE INC: Egan-Jones Retains B+ Senior Unsecured Ratings -------------------------------------------------------------- Egan-Jones Ratings Company on May 11, 2023, maintained its 'B+' foreign currency and local currency senior unsecured ratings on debt issued by Stericycle, Inc. Headquartered in Bannockburn, Illinois, Stericycle, Inc. is a business-to-business services company. SYRACUSE INDUSTRIAL: Fitch Affirms 'C' Rating on 2016A/B Bonds -------------------------------------------------------------- Fitch Ratings has affirmed the following Syracuse Industrial Development Agency, New York (SIDA) bonds at 'C': - Approximately $198.8 million Payments in Lieu of Taxes (PILOT) revenue refunding bonds, series 2016A (Carousel Center Project); - Approximately $10.6 million PILOT revenue refunding bonds, taxable series 2016B (Carousel Center Project); - Approximately $69.1 million PILOT revenue bonds, taxable series 2007B (Carousel Center Project). Entity/Debt Rating Prior ----------- ------ ----- Syracuse Industrial Development Agency (NY) [Carousel Center PILOT] Syracuse Industrial Development Agency (NY) /Property Assessment – PILOT/1 LT LT C Affirmed C SECURITY The bonds are secured by PILOTs on the original or 'legacy' Carousel Center mall payable to SIDA by the Carousel Center Company LP (the Carousel Owner) pursuant to a PILOT agreement as well as by interest earnings on debt service reserves. The debt service reserve funds total 125% of average annual debt service, or about $31 million. ANALYTICAL CONCLUSION The 'C' rating on the PILOT revenue bonds reflects Fitch's view that the Carousel Center's appraised value, which is well below the outstanding amount of PILOT debt continues to erode the owner's incentive and ability to make increasing annual PILOT payments, and that a default of some kind appears probable. The mall's roughly $161.1 million appraisal as of May 2022 -- the most recent publicly available valuation -- reflected a 25% decline from 2021 and was largely the result of reduced mall activity, which was worsened by the mall's closure during the pandemic and subsequent slow reopening. A failure of the servicer to extend the borrower's commercial pass-through certificates (CMBS) loan past the current June 6, 2023 expiration would signal a further weakening of the servicer's incentive to continue making PILOT payments on the revenue bonds. CURRENT DEVELOPMENTS In addition to the PILOT bonds, there is a $300 million mortgage loan on the legacy Carousel Center property along with a $130 million mortgage on the expansion project, both of which have been securitized as CMBS. The CMBS loans have benefited from a special servicer (Wells Fargo & Co; Issuer Default Rating [IDR] of A+/Negative) whose role in advancing the PILOT payments and the PILOT's strong lien position in the mall's debt structure had been important rating considerations. However, in 2019 the special servicer entered into an agreement with the borrower granting a moratorium on CMBS loan payments and an extension of the loan through June 6, 2022. The loan was originally due June 2019. Prior to June 6, 2022, the borrower entered into a CMBS Modification agreement with Wells Fargo that provided a one-year initial loan extension through June 6, 2023 with four one-year extension options subject to achieving certain financial hurdles. The borrower and Wells Fargo are currently in the process of confirming the first extension to extend the agreement until June 6, 2024. Fitch believes that if the servicer loan is not extended past June 6, it would signal a further weakening of the servicer's incentive to continue advancing PILOT payments for the SIDA revenue bonds. KEY RATING DRIVERS LEVERAGE RATIO WEAKENING: The most recent appraised valuation indicates combined PILOT and CMBS debt is more than 4x the value of Destiny USA (the Carousel Center plus the expansion project) as of May 2022. The potential for recovery to the pre-pandemic valuation is not yet discernable but appears unlikely over the medium term. SERVICER PROVIDES LIQUIDITY: The mortgage servicer, required as part of the securitization of the underlying commercial loan on the Carousel Center, is responsible for providing needed liquidity to cover any shortfalls in PILOT payments until mall operations recover or the PILOT lien is foreclosed, regardless of the property's value. PILOT LIEN STATUS: PILOT payments are on parity with all governmental fees and charges, all of which are senior to other payment obligations. Repayment of the CMBS loans is subordinate to the PILOTs. NO IDR: SIDA has no material exposure to operating risk. As such, Fitch has not assigned an IDR, and there is no related cap on the PILOT bond rating. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Solid evidence that the mall's value will improve to a level at least modestly above the amount of PILOT debt as the mall continues to recover from the pandemic-related closure. Factors that could, individually or collectively, lead to negative rating action/downgrade: - A non-payment of interest or principal would lead to a downgrade of the rating to 'D'. TALEN ENERGY: Exits Chapter 11 With New Board and CEO ----------------------------------------------------- Olivia Pulsinelli of Houston Business Journal reports that Talen Energy Corp., a power generation and infrastructure company, and subsidiaries emerged from bankruptcy protection May 17, 2023, after completing a restructuring. Through the company's reorganization plan and financing transactions, Talen Energy Supply LLC reduced its debt by approximately $2.7 billion. The company also is emerging with approximately $875 million of liquidity including cash on hand and undrawn funds in its revolving credit facilities. Talen Energy Supply, a subsidiary of Talen Energy Corp., and 71 affiliated debtors filed voluntary Chapter 11 petitions in Houston in May 2022 to reorganize and eliminate $3.2 billion of the company's debt. At the time, the company's funded debt totaled $4.455 billion, including total secured debt of almost $2.9 billion and total unsecured debt of more than $1.56 billion. In December 2022, Talen Energy Corp. joined the bankruptcy case to execute the reorganization plan, which the U.S. Bankruptcy Court for the Southern District of Texas approved that month. Cumulus Growth subsidiaries, LMBE-MC Holdco II LLC and its subsidiaries, and Talen Receivables Funding still were not part of the filing. The company's reorganization plan included a common equity rights offering of $1.4 billion. Additionally, Talen Energy Supply raised: * $700 million revolving credit facility. * $1.2 billion from a private offering of 8.625% senior secured notes due 2030, up from the initial $825 million. * $580 million Term Loan B credit facility. * $470 million Term Loan C credit facility. * $75 million bilateral line of credit. In April 2023, the company announced then-CEO Alejandro Hernandez would leave Talen Energy once the company completed its restructuring. Now, Mark "Mac" McFarland has stepped into the role of president and CEO and has joined the board of directors. "Today Talen has emerged having transformed its balance sheet and in a much stronger position to operate our business and drive future value creation," McFarland said in a statement. "I look forward to working with our leadership team and board to maximize the value of our diverse asset base and growth businesses. Our focus will remain on safety, operational excellence and value creation while carefully managing credit, liquidity, and risk management so that we can maximize the value of our core business." McFarland most recently served as president and CEO of California Resources Corp. (NYSE: CSC), a Long Beach, California-based energy and carbon management company. Previously, he also held leadership roles with Houston-based GenOn Energy; Irving, Texas-based Luminant Holding Company LLC; and Chicago-based Exelon Corp. (Nasdaq: EXC). He has also served on the boards of Houston-based Bruin E&P Partners, New York-based TerraForm Power, and Oklahoma City-based Chaparral Energy, now known as Canvas Energy Inc. In addition to McFarland, Talen Energy's new board of directors consist of Chairman Stephen Schaefer, Gizman Abbas, Anthony Horton, Karen Hyde, Joseph Nigro and Christine Benson Schwartzstein. 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. TALKING TADPOLES: Court OKs Final Cash Collateral Access -------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas, Fort Worth Division, authorized Talking Tadpoles, LLC to use cash collateral on a final basis, in accordance with the budget, with a 10% variance. The Debtor depends on the use of cash collateral to finance its operation. As previously reported by the Troubled Company Reporter, a search in the Texas Secretary of State shows that allegedly secured positions are held by The American National Bank of Texas; OnDeck Company; and CFS CAP, LLC (aka Cash Fund). As adequate protection for the use of cash collateral, the creditors are granted replacement liens on all post-petition cash collateral and post-petition acquired property to the same extent and priority they possessed as of the Petition Date. A judicial determination that a lien is avoidable or invalid unwinds any replacement lien created by the order. A copy of the Court's order is available at https://urlcurt.com/u?l=ZNcrDM from PacerMonitor.com. A copy of the budget is available at https://urlcurt.com/u?l=xEmCT4 from PacerMonitor.com. The Debtor projects $410,000 in cash receipts and $371,478 in cash disbursements for one month. About Taking Tadpoles, LLC Taking Tadpoles, LLC operates a pediatric therapy practice that offers a full range of services for communication, feeding, sensory, and fine motor difficulties for children birth through 21 years of age. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Tex. Case No. 23-41165) on April 26, 2023. In the petition signed by Julissa Irachet, executive director, the Debtor disclosed up to $500,000 in assets and up to $1 million in liabilities. Judge Mark X. Mullin oversees the case. Robert C. Lane, Esq., at Lane Law Firm, represents the Debtor as legal counsel. TJC SPARTECH: S&P Downgrades ICR to 'B-', Outlook Stable -------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on TJC Spartech Acquisition Corp. to 'B-' from 'B'. The outlook remains stable. At the same time, S&P lowered its issue-level rating on Spartech's first-lien term loan to 'B-' from 'B'. The recovery rating remains '3'. The stable outlook reflects S&P's view that despite weaker demand trends, Spartech can maintain S&P Global Ratings' adjusted debt to EBITDA of mid-7x over the next 12 months. Slowing demand across Spartech's cyclical end markets will result in declining revenue in 2023. S&P said, "We believe the company's fourth quarter of 2022 indicated the start of a slowing demand environment. Spartech's performance saw a boost in demand in 2021 as the company's cyclical end markets recovered from the 2020 pandemic. However, pent-up pandemic demand ran dry in 2022. Spartech's revenue growth in 2022 was mainly driven by pricing and contributions from acquisitions, which offset volume declines in some of its cyclical end markets. In 2023, we expect demand to remain below 2021 levels with somewhat limited ability to introduce additional pricing without sacrificing further volume declines. Even including the full-year contribution from the Sherman acquisition made in 2022, we expect 2023 revenue to decline mid- to high-single-digit percent." Leverage will remain elevated due to lower earnings and a higher amount of debt from recent acquisitions. S&P expects softening demand combined with elevated debt levels (from the acquisitions of Sherman in 2022 and Crawford in 2021) to result in S&P Global Ratings' adjusted debt to EBITDA of mid- to high-7x for the next 12 months. While the Sherman acquisition modestly strengthened Spartech's operating leverage and expanded the company's ability to provide environmentally friendly services, improvements in resin prices have led to a slight decline in demand for recycled material compared with new material as the value proposition has weakened. S&P said, "We expect the company to maintain adequate liquidity to meet its needs over the next 12 months despite interest rate risk. Despite rising interest rates pressuring the company's ability to generate significant funds from operations (FFO), we expect Spartech to maintain adequate liquidity over the next 12 months. The company maintained elevated cash levels on its balance sheet relative to similarly rated peers as of March 31, 2023. Further, elevated working capital levels driven by supply chain issues last year and pent-up pandemic demand should ease, resulting in a modest winddown of working capital in 2023. While we forecast the company to generate free operating cash flow (FOCF) in 2023, it will likely be lower than previous levels. We expect that lower earnings along with increased interest expense and higher levels of capital expenditure (capex) will result in flat to $10 million of FOCF. "The stable outlook reflects our view that despite weaker demand trends, Spartech can maintain S&P Global Ratings' adjusted debt to EBITDA of mid-7x over the next 12 months." S&P could lower the rating on Spartech if: -- S&P views its capital structure as unsustainable, which could occur if its S&P Global Ratings' adjusted debt to EBITDA is above 9x; or -- Its liquidity weakens or Spartech increases its reliance on its revolver such that it triggers the leverage covenant and S&P believes it cannot maintain headroom of at least 15%. S&P could raise the rating on Spartech if: -- Stronger-than-expected operating performance sustains leverage below 6.5x, including debt-funded acquisitions and dividends; and -- Spartech maintains adequate liquidity, with positive FOCF generation and sufficient borrowing capacity under its revolver. ESG credit indicators: E-2, S-2, G-3 TOP LINE GRANITE: Court OKs Cash Collateral Access Thru June 29 --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Massachusetts authorized Top Line Granite Design Inc. to use cash collateral under the same terms and conditions provided in prior court orders, through June 29, 2023. A hearing on the matter is set for June 29 at 10 a.m. As previously reported by the Troubled Company Reporter, the Debtor was permitted to use of cash collateral in the ordinary course of its business to pay all reasonable expenses necessary to maintain and continue usual business operations. As adequate protection, lienholders were granted post-petition replacement liens and security interests in property of the Debtor's estate, to the extent of valid perfected security interests as of the Petition Date not subject to avoidance, in an amount equivalent to the amount of cash collateral expended by the Debtor, of the same type, in the same nature and to the same extent as the Lienholders had in the assets pre-petition to the extent the lienholders held validly perfected and unavoidable liens and security interests as of the Petition Date. The Post-petition Liens will only secure the amount of any diminution in the value of the Lienholders' prepetition collateral constituting cash collateral resulting from the Debtor's use thereof in the operation of the Debtor's business in the Post-petition Period. The Post-petition Liens will have the same priority, validity, and enforceability as the Lienholders' liens on their pre-petition collateral. As further adequate protection, to the extent funds are available, the Debtor was authorized to make monthly adequate protection payments to the Lienholders. A copy of the order is available at https://urlcurt.com/u?l=uCuZb9 from PacerMonitor.com. About Top Line Granite Design Inc. Top Line Granite Design Inc. is a manufacturer of cut stone and stone products. Top Line offers a selections of kitchen granite, marble and quartz. Top Line sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Mass. Case No. 22-40216) on March 25, 2022. In the petition signed by Edmilson Ramos, president, the Debtor disclosed up to $10 million in assets and up to $50 million in liabilities. Judge Christopher J. Panos oversees the case. Alan L. Braunstein, Esq., at Riemer and Braunstein LLP is the Debtor's counsel. TPC GROUP: Mid-County Residents Frustrated Over $30M Settlement --------------------------------------------------------------- Lupita Villarreal and Ebonee Coleman of 12News report that people in Port Neches are expressing their frustrations after realizing TPC has reached a $30 million bankruptcy settlement. This comes three-and-a-half years after its chemical plant exploded and damaged homes all over Mid-County. The initial explosion happened on November 27, 2019 just before 1 a.m. Now, thousands of people will be vying for their cut of the settlement and are starting to realize there's not enough money to go around. Lawyers spearheading this case and trustees from the bankruptcy had a series of meetings Wednesday, May 17, 2023, at the KC Hall in Port Neches. Wade Kimble lives a few miles from the TPC plant. The explosion left his home with significant damage by blowing doors off the hinges and blowing double-pane windows. Now, Kimble is among the 8,000 people looking to get a piece of the settlement. "That's what i'm irritated at why and how they weren't able to have adequate coverage," Kimble said. "It's just a drop in the bucket compared to the damages." TPC filed for bankruptcy in 2021 in Delaware. A settlement was recently announced. Mark Sparks, a partner at Ferguson Law Firm in Beaumont, is one of the lawyers leading the lawsuits. He says thousands of claims were filed. "TPC chose to under-insure itself for its victims, so it didn't have enough insurance and ultimately filed for bankruptcy," he said. Marks says people need to file claim forms to be considered for any of this money. "The claim form for these funds, the bankrupt funds that needs to be filed no later than August 1. If you have attorneys and they filed in the mdl they have hopefully sued along with us in the master complainants for all the defendants and this is not the end of the road for you," Marks said. Sparks and other lawyers vow to keep fighting for the families of Mid-County. They also say, this isn't the end of the legal road. "The lawyers myself and all the other firms have sued multiple new defendants that have contributed to this accident. We're seeking their entire insurance policies," Marks said. Sparks said once they get all the claims in, they will decide what's fair and they'll come back to residents with proposals. It may be year or so, before anyone gets any money, according to Sparks. About TPC Group TPC Group, headquartered in Houston, is a producer of value-added products derived from petrochemical raw materials such as C4 hydrocarbons, and provider of critical infrastructure and logistics services along the Gulf Coast. The Company sells its products into a wide range of performance, specialty and intermediate markets, including synthetic rubber, fuels, lubricant additives, plastics and surfactants. With an operating history of more than 75 years, TPC Group has a manufacturing facility in the industrial corridor adjacent to the Houston Ship Channel and operates product terminals in Port Neches, Texas and Lake Charles, Louisiana. TPC Group Inc. and its subsidiaries sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 22-10493) on June 1, 2022. TPC Group estimated assets and debt of $1 billion to $10 billion to $10 billion. The Hon. Craig T. Goldblatt is the case judge. Baker Botts L.L.P. is the Debtors' counsel; Morris, Nichols, Arshtn & Tunnell LLP is the co-counsel; Moelis & Company LLC is the investment banker; and FTI Consulting is the financial advisor. Simpson Thacher & Bartlett LLP is the special finance counsel. Kroll Restructuring Administration is the claims agent. Eclipse Business Capital LLC is advised by Goldberg Kohn Ltd. Paul Hastings LLP, and Stroock & Stroock & Lavan LLP are serving as counsel to the Ad Hoc Noteholder Group that supports the Debtors' restructuring. Evercore Group L.L.C., is the Group's financial advisor. Young Conaway Stargatt & Taylor, LLP is local counsel to the Ad Hoc Noteholder Group. The Supporting Noteholders are funds controlled by FIG LLC and Fortress Capital Finance III(A) LLC, Monarch Alternative Capital LP., PGIM Inc., Redwood Capital Management LLC, and Strategic Value Partners LLC. Pachulski Stang Ziehl & Jones LLP, Proskauer Rose LLP, and Selendy Gay Elsberg PLLC are serving as counsel to an Ad Hoc Group of Non-Consenting Noteholders, led by Bayside Capital, Inc., and Cerberus Capital Management, L.P. Milbank LLP previously served as the group's counsel but was later replaced by Pachulski and SGE. * * * TPC Group Inc. emerged from bankruptcy protection on Dec. 16, 2022. The company's plan of reorganization was confirmed by the Court on Dec. 1, 2022. The reorganization plan eliminates more than $950 million of TPC's $1.3 billion in secured funded debt and other litigation liabilities stemming from an explosion at the company's chemical facility in Port Neches, Texas, in November 2019, TPC Group said Dec. 16, 2022. TPC Group also said the reorganization plan gives the petrochemical company new capital as it emerges from restructuring, including $350 million in exit notes and $165 million through an equity rights offering. TRONOX LIMITED: Egan-Jones Retains BB- Senior Unsecured Ratings --------------------------------------------------------------- Egan-Jones Ratings Company on May 8, 2023, maintained its 'BB-' foreign currency and local currency senior unsecured ratings on debt issued by Tronox Limited. Headquartered in Stamford, Connecticut, Tronox Limited operates mining and inorganic chemical businesses. TUESDAY MORNING: Cash Collateral Request Irks Lender ---------------------------------------------------- The Bankruptcy Court on May 18, 2023, entered an interim order authorizing the Tuesday Morning Corp., et al., to use cash collateral consistent with the interim budget through the week ending June 3, 2023, and finding that the proposed adequate protection to the FILO C Lender, the Term Lenders, and Invictus is appropriate and reasonable. A final hearing on the Debtors' Cash Collateral Motion shall take place before the Honorable Edward L. Morris, United States Bankruptcy Judge, at the United States Bankruptcy Court, Northern District of Texas, Fort Worth Division, Eldon B. Mahon U.S. Courthouse, 501 W. 10th Street, Fort Worth, Texas 76102, on June 15, 2023 at 1:30 p.m. Central Time. On or before June 2, 2023, the Debtors shall file with the Clerk of Court a proposed final wind down budget and proposed final order. Any objection to the entry of a final order on the Motion shall be in writing and shall be filed with the Clerk of the Court so that any such objections are received no later than June 13, 2023 at 5:00 p.m. Central Time. According to the Interim Order, the Debtors, the Committee and the Remaining Secured Creditors are encouraged to work in good faith to reach agreement on a stipulation regarding the use of Cash Collateral for the period commencing on June 4, 2023 and continuing through the Final Hearing (the "Further Interim Period"). In the event that the Debtors, the Committee and the Remaining Secured Creditors are unable to reach agreement on a stipulation regarding the use of Cash Collateral during the Further Interim Period, the Court will hold a hearing on May 31, 2023 at 1:30 p.m. Central Time to consider further interim relief on the Motion with respect to use of Cash Collateral during the Further Interim Period. Debtor-in-possession financing lender Invictus Global Management on May 17, 2023, filed documents opposing the proposed use of cash collateral by bankrupt retailer Tuesday Morning on an interim wind-down budget, saying there is only enough money to pay the DIP claims. According to Invictus, the obligations under the Invictus DIP Agreement and the Invictus DIP Order are in an amount of not less than $15,162,500, which amount includes the $15 million in principal outstanding and default rate interest from and after Feb. 28, 2023, in an amount of not less than $162,500, plus reimbursement of Invictus's professional fees. "invictus's claims under the Invictus DIP Agreement and the 1903 DIP Agreement are secured by the Cash Collateral, which is virtually the only remaining asset in the Debtors' estates following the sale of substantially all of their assets to Hilco. The Debtors have no remaining cash-generating assets and have indicated their intent to convert the chapter 11 cases to chapter 7 in the near future. As will be demonstrated to the Court when the Debtors disclose the full wind down budget, every dollar of Cash Collateral proposed to be spent under the Interim Wind Down Budget will diminish Invictus's recovery on its secured claims," Invictus said in court filings. "In this situation of a diminished and diminishing estate, Section 363 of the Bankruptcy Code is clear and unambiguous and requires that the Court "shall prohibit or condition" use of Cash Collateral "as necessary to provide adequate protection of [Invictus's] interest" in it. The Debtors have no means to adequately protect Invictus from the diminution in value of the remaining Cash Collateral other than to prohibit its use without Invictus's consent." "The Emergency Motion announced the Debtors' intention to convert the Chapter 11 Cases to chapter 7 at some point in the future. Given that the Debtors know that they are administratively insolvent, it is unclear why the Debtors are seeking to extend their time in chapter 11. There is no pot of gold at the end of this budget -- just an estate with less money available to pay secured creditors than it has today," Invictus added. TASCR VENTURES CA, LLC, TASCR VENTURES, LLC, and TM21, LLC (collectively, the "TASCR Parties") filed a conditional consent to the Debtors' interim use of cash collateral. The TASCR parties are owed in excess of $9.0 million which, as noted by the Debtors, is fully secured. Interest accrues at the per diem rate of $2,945. If the Final Hearing is held on June 8, 2023, approximately $60,000 of additional interest will have accrued. Professional fees will continue to accrue until the FILO C Note is paid in full. The TASCR Parties support the Debtors' proposed use of cash collateral as set forth in the Motion, including their commonsense decision to pay in full the FILO C Noten in order to "preserve more of the sale proceeds for other creditors." "The legal warfare that characterized these cases prior to the Hilco sale resulted in millions of dollars of fees and costs that were incurred by senior secured creditors to the detriment of junior creditors -- most directly the Term Lenders and Invictus. Now is the time to change that pattern. The Debtors' decision to pay the FILO C Note comports with their fiduciary duty to maximize their estates and is consistent with the Court's comments at the sale hearing held on April 27, 2023 urging that the Debtors should do exactly that. Failure to pay the FILO C Note will result in the continued accrual of default interest and professional fees to the benefit of no one. The sooner that this issue is decided the sooner those expenses will cease to accrue," the TASCR Parties said. "With respect to the Debtors' proposed operating and other line-item expenses as set forth in the interim wind-down budget, following receipt of the Motion, the TASCR Parties' financial advisors at Lain Faulkner communicated with the Debtors' financial advisors at Force 10 and reviewed the proposed expenditures with them. Those expenditures appear to be reasonable, and the TASCR Parties do not object to them for this interim period." About Tuesday Morning Dallas, Texas-based Tuesday Morning Corporation is an off-price retailer specializing in products for the home, including upscale home textiles, home furnishings, housewares, gourmet food, toys and seasonal decor, at prices generally below those found in boutique, specialty and department stores, catalogs and on-line retailers. Tuesday Morning and several affiliates filed for Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Lead Case No. 23-90001) on Feb. 14, 2023. The Debtors said both assets and liabilities, on a consolidated basis, range from $100 million to $500 million. Judge Edward L. Morris presides over the cases. The Debtors tapped Munsch Hardt Kopf & Harr, P.C., as bankruptcy counsel; Phelanlaw as special counsel; Force Ten Partners LLC as financial advisor; and Piper Sandler & Co. as investment banker. Stretto, Inc., is the claims and noticing agent. The U.S. Trustee for Region 6 appointed an official committee to represent unsecured creditors. The committee is represented by the law firms of Fox Rothschild, LLP and Lowenstein Sandler, LLP. Province, LLC serves as the committee's financial advisor. UNION CIGAR: Court OKs Cash Collateral Access Thru Aug 25 --------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Pennsylvania authorized Union Cigar, LLC to use cash collateral on an interim basis in accordance with the budget, through August 25, 2023. The Debtor requires the use of cash collateral to continue its operations. As previously reported by the Troubled Company Reporter, PeoplesBank is believed to hold a first priority security interest in the personal property of the Debtor, including inventory and accounts. Coolidge Capital, LLC is believed to hold a second priority security interest in the future sales of the Debtor and possibly in the accounts of the Debtor. The Debtor does not currently have any accounts receivables. Also based upon the value of the assets, the Debtor believes Coolidge is not a secured creditor. PeoplesBank holds a first security interest in cash collateral in the approximate amount of $58,113. Further, it is believed PeoplesBank has a third priority security interest in Cash Collateral in the approximate amount of $53,113. Coolidge may hold a second priority security interest in cash collateral in the approximate amount of $12,250. PeoplesBank and Coolidge Capital, LLC are granted replacement liens in the Debtor's post-Petition Cash Collateral consisting of receivables, cash and the proceeds thereof, and in all assets of the Debtor upon which PeoplesBank and Coolidge have liens and security interests prePetition, to the extent such liens exist and in such priority as exists pre-Petition, to the extent there is a diminution in value of PeoplesBank's and Coolidge's post-Petition Cash Collateral position. Such liens will be perfected and effective without any further recordation action, and such liens will survive conversion of the case or appointment of a Trustee in the case. In the event the post-Petition Cash Collateral is insufficient to provide an amount equal to such diminution, then PeoplesBank and Coolidge will have super priority status pursuant to 11 U.S.C. Section 364(c)(1) and have administrative claims with priority over all other administrative claims, except for amounts owed for fees to professionals in the case and fees to the Subchapter V Trustee, which fees will be pari passu with PeoplesBank's and Coolidge's administrative claims. As further partial adequate protection of PeoplesBank's interests in and for the Debtor's use of cash collateral pending confirmation of a plan in the proceeding, and to remedy a defect in documentation of a lien granted by Debtor to PeoplesBank pre-petition, PeoplesBank is granted a continuing security interest in and lien upon the Debtor's certain lounge trailer, effective as of the date of the Order, which lien will survive conversion or appointment of a Trustee in the case. A further hearing on the matter is set for August 22 at 9:30 a.m. A copy of the order is available at https://urlcurt.com/u?l=GTGXy6 from PacerMonitor.com. About Union Cigar, LLC Union Cigar, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Pa. Case No. 23-00873) on April 20, 2023. In the petition signed by John-Waite, Weiser, manager, the Debtor disclosed up to $1 million in both assets and liabilities. Judge Henry W. Van Eck oversees the case. Robert E. Chernicoff, Esq., at Cunningham, Chernicoff & Warshawsky PC, represents the Debtor as legal counsel. VENTURE GLOBAL: Fitch Affirms LongTerm IDR at 'B', Outlook Stable ----------------------------------------------------------------- Fitch Ratings has affirmed at 'B' Venture Global LNG, Inc. (VGLNG)'s Long-Term Issuer Default Rating (IDR). Fitch has also affirmed the 'BB-'/'RR2' senior secured rating and reflects the $500 million note upsizing. Any further upsizing would lead to a lower recovery rating and a downgrade of the note rating. The Rating Outlook is Stable. VGLNG ratings reflect the volatility of its primary revenue source due to commodity price exposure associated with early commissioning revenues. The revenues are generated from liquified natural gas (LNG) commissioning cargos sold in the global LNG market at spot prices. Also reflected is the project completion risks at VGLNG's two LNG projects currently under construction. Once the LNG projects are complete, VGLNG benefits from incremental cashflow provided by distributions from the projects. Fitch expects the LNG projects to generate predictable cash flows under long-term sale and purchase agreements (SPAs) with predominately investment-grade counterparties under take- or-pay contracts. Fitch expects VGLNG to manage the large scale, multi-year construction projects in a credit supportive manner. KEY RATING DRIVERS High Commodity Exposure: Fitch believes VGLNG's approach to fund future LNG plants with the early cargo sales exposes the company to significant commodity risk. The mid-scale modular trains produce substantially more LNG cargos during commissioning than a typical stick-built large-scale LNG Train. VGLNG sells these cargos into the short-term market on a rolling basis, as units are commissioned and before the long-term SPAs commence. Increasing Global LNG Supply: VGLNG benefited during the commissioning of its first project, Venture Global Calcasieu Pass, LLC (VGCP), when the market basis differential between Henry Hub (HH) gas and Title Transfer Facility, the European LNG hub, reached historic highs in 2022. However, global LNG pricing has returned closer to historic norms, and will vary based on global supply and demand, potentially impacting the FCF available for VGLNG to finance its future LNG construction and meet debt obligations. Fitch believes demand for LNG will remain strong in the near term, given the European drive to move away from Russian natural gas, acceleration of the energy transition and limited new LNG production capacity coming online until the mid-2020s. However, LNG spot market pricing is expected to tighten as new LNG plants come online in 2025 and 2026 globally. Fitch's price deck supports this view. Past cycles as recent as 2019 illustrate the drop-in spot market prices as new production capacity outpaced global demand. Ongoing Construction and Commissioning Risk: VGLNG's construction risk will be ongoing over the near term. The first project, a 10 mtpa mid-scale LNG facility, VGCP, is nearing a 2024 commercial operation date (COD). Construction at Venture Global Plaquemines (VGPL), a 20 mtpa mid-scale LNG facility, is almost 40% complete as of March, 2023. Fitch believes LNG plants are among the most complex facilities in its rated midstream portfolio to construct and operate. The VGPL project is a very large scale $18.4 billion project being constructed by a joint venture of KBR and Zachry Group. VGPL is using a proven mid-scale liquefaction technology employed at VGCP but has potential scale-up and interface risks through its multi-contractor structure. The project's off-site modular fabrication avoids risk seen in large-scale on-site manufacturing. However, it differs from other LNG projects that rely on a single contractor to bear most, if not all, budget and completion risk. Some of these risks are mitigated by the construction progression, experienced specialized contractors, performance security and an above average contingency and incentives for early completion. Structural Subordination During Operations: VGLNG's debt obligations benefit from the early cargo revenues generated during the commissioning period from its projects. After commissioning, VGLNG debt obligations will rely on distributions paid after servicing $6.0 billion of non-recourse debt at VGCP and $12.9 billion at VGPL. Project indentures contain a covenant preventing distributions if forward-looking debt service coverage ratios (DSCR) are less than 1.25x. This provision is likely triggered as the projects face refinancing risk at COD and an uncertain opex profile during ramp-up. VGCP has a lower refinancing risk having refinanced most of its term loan and addressed ramp- up issues during commissioning. Refinancing project debt requires full amortization of principal within the SPA terms and reduces cash available for distribution to VGLNG. Fitch believes management will use credit supportive measures to ensure headroom under the distribution tests in addressing these issues. Robust Sales and Purchase Agreements: FCF from VGCP and VGPL is backed by long-term SPAs with largely investment-grade counterparties, comprised of 19 customers across the two projects. Each will operate under the contracts once COD is reached. Fitch believes the contract structure available during the operating period provides stable cash flow while insulating cash flow from trends in the global LNG market but is a small portion of the cash flow available to VGLNG's bondholders. Credit Metrics: Fitch applies a deconsolidated and proportionally consolidated approach in calculating VGLNG's credit metrics. The subsidiaries have non-recourse debt, which is considered in the proportionally consolidated credit metrics. Stonepeak Infrastructure owns two series of preferred instruments, one which, based on current projections, is expected to convert into approximately 25% ownership of VGCP at COD. Fitch considers these preferred instruments as debt under its criteria. Holdco-only FFO Leverage (total holdco debt divided by cash available for debt service after maintenance capex) averages less than 2.5x over the forecast period through 2027, with growth capex funded from excess cash flow, among other sources. On a proportionally consolidated basis, leverage (total consolidated debt to proportional EBITDA) averages just over 6.0x during 2023-2027, but peaks at 12.0x in the near-term during a period of high capex and declining market global spot prices. This peak leverage highlights the commodity risk. DERIVATION SUMMARY VGLNG is a midstream corporation with two projects under construction. Advanced capital equipment purchases are underway for a third project. The first project, a 10 mtpa facility in Calcasieu Pass, LA, has been operational under commissioning since 2022. The majority of the cashflow is from sales of early commissioning LNG cargos in the global spot market. Additionally, its operations are supported by long-term take-or-pay contracts with a diverse mix of predominately investment grade customers, similar to peer Cheniere Energy Inc. (CEI; BBB-/Stable). CEI is a midstream corporation with the largest LNG production and export facilities (60 mtpa) in the U.S. and second largest globally. VGLNG's obligations are backed by long-term SPAs with largely investment-grade counterparties, comprised of 19 customers across the two projects, VGCP and VGPL. Each SPA provides revenue from a fixed-capacity fee paid regardless of LNG volumes lifted and a commodity-based variable fee on LNG volumes delivered, equal to 115% of current HH prices. The contracts are almost all 20 years. VGCP has two short term contracts of less than five years (15% of capacity). VGLNG's obligations are structurally subordinate to about $20 billion of operating subsidiaries' project obligations, which were used to fund the construction of the LNG facilities and related lateral pipelines. CEI has a similar structure, with its obligations subordinate to about $19 billion of project debt and $4 billion of intermediate holding company debt. Both are subject to distribution tests that could impede distributions to the parent companies. While both VGLNG and CEI receive revenues from short term market sales, the early cargo revenues are a larger portion of total cash flow for VGLNG compared to CEI. CEI has greater scale, operating two seasoned projects, Sabine Pass Liquefaction (BBB/Stable) and Corpus Christi Liquefaction (BBB-/Stable), with expected DSCRs well in excess of its distribution coverage test, mitigating the concern over distribution lock-ups ultimately to the parent. While VGLNG has revenues from early cargos, those revenues, in Fitch's opinion, are not as predictable, and subject to commodity price risk. VGLNG's leverage is considerably higher than CEI, on a proportionally consolidated basis, averaging 6.0x during the forecast. CEI's Fitch forecasted leverage is between 4x-4.5x after 2024. The difference in cashflow predictability, scale and leverage account for the difference in the ratings. KEY ASSUMPTIONS - VGCP, nearly complete, reaches COD in Q1 2024 and the SPA contracts begin. Nameplate capacity of 10 mtpa is fully contracted and generates additional liquefaction fees on 1.0 mtpa excess capacity above nameplate, which is contracted to an affiliate; - Construction at VGPL continues on schedule consistent with management expectations of about $19 billion cost, reaching first commissioning in 2024. The term loan is refinanced in 2027 at a rate of 8%, when COD occurs. Nameplate capacity of 20 mtpa is fully contracted and generates additional liquefaction fees on 2.5 mtpa excess capacity above nameplate, which is contracted to an affiliate; - Construction of CP2 is in line with management expectations, at a cost of about $26 billion, and reaches COD at the end of 2027. The first phase of the third project, CP2, is currently close to 48% contracted and assumed to be fully contracted during the operating period; - The Delta project is not funded during the forecast period; - The Fitch price deck for oil and natural gas informs the assumptions for natural gas, crude, LNG and the unhedged volumes. The Fitch operating margin under the rating case for the early commissioning cargos is as follows: $10.00/MMBtu in 2023, $8.00/MMBtu in 2024, $7.00/MMBtu in 2025, $5.00/MMBtu in 2026, and $4.00/MMBtu in 2027. - For the Recovery Rating, Fitch estimates the company's going-concern value was greater than the liquidation value, despite the high equity value retained by VGLNG in VGCP and VGPL. The going-concern EBITDA estimate of $1,530 million reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which Fitch bases the valuation of the company. Fitch calculated administrative claims to be 10%, which is the standard assumption. Fitch assumes the default occurs in 2024 during a period of depressed LNG spot market pricing and VGCP begins to operate under the long-term SPAs as it reorganizes. As per criteria, the going concern EBITDA reflects some residual portion of the distress that caused the default; - The going-concern multiple used was a 4.0x EBITDA multiple, which reflects the default occurring during construction and the reorganization would be impacted by the complexity and large scale of the construction project; - The recovery reflects the lien status of the senior notes, paid from the residual equity value, after the redeemable preferred units at Calcasieu Pass Funding, LLC and the remaining Plaquemines Equity Bridge loan; - There have been a limited number of bankruptcies within the midstream sector. Two recent gathering and processing bankruptcies of companies indicate an EBITDA multiple between 5.0x and 7.0x, by Fitch's best estimates. In its recent Bankruptcy Case Study Report, "Energy, Power and Commodities Bankruptcies Enterprise Value and Creditor Recoveries", published in September 2021, the median enterprise valuation exit multiple for the 51 energy cases with sufficient data to estimate was 5.3x, with a wide range of multiples observed. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Reach COD for VGCP and commissioning of VGPL; - Reduction in the reliance on the commodity price exposed cashflows; - Reduction in the refinancing exposure at VGPL resulting in improved distributions to VGLNG. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Any upsizing above the $500 million offered during the first time $4 billion senior note transaction; - Significant weakness in global LNG prices, pressuring the company's cash flow generation from early cargoes; - Any construction issues that significantly increases costs or results in deteriorating cash flows; - Holdco-only FFO leverage above 4.0x on a sustained basis or proportionally consolidated leverage above 7.0x on a sustained basis; - A multi-notch downgrade or financial distress of any SPA counterparty. LIQUIDITY AND DEBT STRUCTURE Sound Liquidity: VGLNG and its subsidiaries have sound liquidity. As of March 31, 2023, VGLNG had $814 million cash. About $120 million of the cash is restricted to support project level debt service reserve funds. Each project has a working capital facility to support its needs, primarily natural gas purchases. Distributions can be made to VGLNG from VGCP and VGPL as long as the DSCR is greater than 1.25x in the next 12 months and the previous 12 months. Debt: Proceeds from the notes will refinance VGLNG's $2.3 billion corporate term loan, which matures in 2025. Covenants under the note agreement are lenient, in Fitch's opinion. Additional debt can be issued up to 5x EBITDA, excluding project level debt in most circumstances and cash distributions are permitted if the FCCR is greater than 1.75x. While these covenants allow FCF to be distributed out of VGLNG under its assumptions, Fitch expects management will use FCF to fund future LNG projects. VG and its subsidiaries have several maturities in the near term. The next maturity is March 2025 when the VGPL Equity Bridge loan comes due. At the project level, the remaining VGCP term loan is due August 2026. The majority of the term loan has been refinanced with four series of non-recourse, project level bonds. These bonds have bullet maturities in 2028-2033. Fitch assumes the remaining term loan will be refinanced in a similar manner with non-recourse debt. At VGPL, there is a term loan that is due in 2029. ISSUER PROFILE Venture Global LNG, LLC is an energy company that develops, builds and operates LNG for export under long term sales and purchase agreements. It currently operates a 10 mpta natural gas liquefaction and LNG export facility and is developing three additional plants, with 70 mtpa total production capacity. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch adjusts the restricted cash accounts on the balance sheet to show cash restricted at its subsidiaries. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Venture Global LNG, Inc. LT IDR B Affirmed B senior secured LT BB- Affirmed RR2 BB- VICE MEDIA: U.S. Trustee Appoints Creditors' Committee ------------------------------------------------------ The U.S. Trustee for Region 2 appointed an official committee to represent unsecured creditors in the Chapter 11 cases of Vice Group Holding, Inc. and its affiliates. The committee members are: 1. Wipro LLC 1114 Avenue of the Americas, Suite 3030 New York, NY 10036 Attn: Pankaj Narnolia, Head - Finance Tel: +91 7259886473 Email: Pankaj.narnolia@wipro.com 2. OMnet LLC 195 Broadway, 8th Floor New York, NY 10007 Attn: Carson Kwan, Sr. Director, Finance Tel: (212) 590-7020 Email: Carson.kwan@omnicomediagroup.com 3. Horizon Media LLC 75 Varick Street New York, NY 10013 Attn: Maria Freda, EVP, Chief Finance Officer Tel: (212) 220-1730 Email: mfreda@horizonmedia.com 4. XWP Co. Pty Ltd. 2/13 Chadwell Grove Chelsea, VIC 3196 Attn: Sarah Prelorenzo, Chief Financial Officer Tel: +61407858190 Email: sarah@x-company.com 5. Wolftech Broadcast Solutions AS Agnes Mowinkelsgate 6 5008 Bergen, Norway Attn: Arild Nordrevoll, Chief Financial Officer Tel: +47 412 38 165 Email: arild@wolftech.no Official creditors' committees serve as fiduciaries to the general population of creditors they represent. They may investigate the debtor's business and financial affairs. Committees have the right to employ legal counsel, accountants and financial advisors at a debtor's expense. About Vice Group Holding Vice is a global, multi-platform media company with a collection of powerful brands, producing premium award-winning content for a highly engaged global youth audience. It creates thousands of pieces of content each week globally, including editorial, digital and social video, experiential events, commercials, music videos, scripted and unscripted television, feature documentaries, and movies. Vice Group Holding, Inc. and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 23-10738) on May 15, 2023. At the time of the filing, the Debtors reported $500 million to $1 billion in both assets and liabilities. Judge John P. Mastando III oversees the cases. The Debtors tapped Togut, Segal & Segal, LLP as bankruptcy counsel; Shearman & Sterling, LLP as special counsel; PJT Partners, Inc. and Liontree Advisors, LLC as financial advisors; and AP Services, LLC as restructuring advisor. Stretto, Inc. is the claims and noticing agent and administrative advisor. VIRGIN ORBIT: Shuts Down After Bankruptcy Sales ----------------------------------------------- CNBC reports that bankrupt rocket company Virgin Orbit is shutting down after selling its facility leases and equipment to a trio of aerospace companies in an auction, the company confirmed on Tuesday. Virgin Orbit filed for bankruptcy protection on April 4 after the company failed to secure a funding lifeline and laid off nearly its entire workforce. Virgin Orbit then sold its assets and equipment to Rocket Lab, Stratolaunch, and Vast's Launcher in a bankruptcy auction. "As Virgin Orbit embarks on this path, the management and employees would like to extend their heartfelt gratitude to all stakeholders," the company said in a statement. "Virgin Orbit's legacy in the space industry will forever be remembered. Its groundbreaking technologies, relentless pursuit of excellence, and unwavering commitment to advancing the frontiers of air launch have left an indelible mark on the industry," the company added. Spun out of Virgin Galactic in 2017 by founder Sir Richard Branson, Virgin Orbit reached rarefied air by flying multiple missions. But difficulty raising funds, and slow execution, brought the once multibillion-dollar company to bankruptcy and ultimately shut down. Sold in pieces The rocket for the company's second demonstration mission undergoing final assembly at its factory in Long Beach, California. Monday’s auction bids amount to about $36 million in total. Virgin Orbit's six or so rockets that were in various stages of manufacturing assembly, and its intellectual property, have yet to be sold, a Virgin Orbit spokesperson confirmed. Rocket Lab successfully bid $16.1 million for the company's headquarters in Long Beach, California, which is about 140,000 square feet, the spokesperson said. Although founded in New Zealand, Rocket Lab was already a neighbor of Virgin Orbit, with a headquarters and facilities in the Long Beach area. Additionally, Rocket Lab’s purchase includes assets such as 3D-printers and a specialty tank welding machine. In a press release, Rocket Lab said the Virgin Orbit assets will improve its production, manufacturing, and test capabilities, especially in developing its larger Neutron rocket. "With Neutron's design and development well-advanced, this transaction represents a capital expenditure savings opportunity to augment our production capability to bring Neutron to the launch pad quickly to serve our customers and their future success. Securing the lease to the [Virgin Orbit facility] adds to our existing presence in Long Beach and provides co-located engineering, manufacturing, and test capabilities for our Neutron team," Rocket Lab founder and CEO Peter Beck said in a statement. Stratolaunch was awarded its $17 million "stalking horse" bid for Virgin Orbit's 747 jet. A Stratolaunch spokesperson, in a statement to CNBC, said the company "continually evaluates ways to increase our capacity to meet the imperative for testing hypersonic technologies via leap-ahead flight demonstrations." "We will share more news about the sale as it becomes available," Stratolaunch noted. Previously in the bankruptcy process, Virgin Orbit agreed to the terms of Stratolaunch's bid, which was to purchase the 747 jet "Cosmic Girl" and other aircraft assets. Stratolaunch has been developing its own airborne system, the world's largest airplane called "Roc," as a platform for hypersonic flight testing. Launcher, a subsidiary of Vast Space, is purchasing the company's facility in Mojave, California -- as well as some machinery, equipment and inventory -- for $2.7 million. Virgin Orbit's Mojave leases include infrastructure such as rocket engine test stands and an aircraft hangar. A liquidation company, Inliper, is purchasing the company's office equipment for $650,000. About Virgin Orbit Virgin Orbit Holdings, Inc (OTCMKTS: VORBQ) -- http://www.virginorbit.com/-- operates one of the most flexible and responsive space launch systems ever built. Founded by Sir Richard Branson in 2017, the Company began commercial service in 2021, and has already delivered commercial, civil, national security, and international satellites into orbit. Virgin Orbit's LauncherOne rockets are designed and manufactured in Long Beach, California, and are air-launched from a modified 747-400 carrier aircraft that allows Virgin Orbit Holdings, Inc., to operate from locations all over the world in order to best serve each customer's needs. Virgin Orbit Holdings, Inc., and its affiliates sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10405) on April 4, 2023. In the petition filed by Daniel M. Hart, as chief executive officer, Virgin Orbit reported total assets of $242,978,000 and total debt of $153,491,000 as of Sept. 30, 2022. The Debtors tapped YOUNG CONAWAY STARGATT & TAYLOR, LLP, and LATHAM & WATKINS LLP as counsel; DUCERA PARTNERS LLC as investment banker and financial advisor; and ALVAREZ & MARSAL NORTH AMERICA LLC as restructuring advisor. KROLL RESTRUCTURING ADMINISTRATION LLC is the claims agent. The Debtors' indirect parent entity, Virgin Investments Limited, in its role as Lender and Administrative Agent and Collateral Agent, has retained Davis Polk & Wardwell LLP, FTI Consulting, Inc., and Morris, Nichols, Arsht & Tunnell LLP as advisors. VOYAGER DIGITAL: Gets Court Clearance to Liquidate, Repay Customers ------------------------------------------------------------------- Jonathan Randles of Bloomberg Law reports that failed cryptocurrency brokerage Voyager Digital Holdings Inc. won court approval to begin winding down its operations and start repaying customers a portion of their crypto that's been held on its platform since last 2022. Judge Michael Wiles approved Voyager’s liquidation procedures Wednesday, May 24, 2023, about a month after Binance.US terminated an agreementto purchase the crypto platform and after a deal to sell itself to FTX last year fell apart. Voyager customers will get about 36% of what they're owed but their recovery could increase if the firm succeeds in a pending dispute with FTX, according to court documents. About Voyager Digital Holdings Based in Toronto, Canada, Voyager Digital Holdings Inc. -- https://www.investvoyager.com/ -- runs a cryptocurrency platform. Voyager claims to offer a secure way to trade over 100 different crypto assets using its easy-to-use mobile application. Through its subsidiary Coinify ApS, Voyager provides crypto payment solutions for both consumers and merchants around the globe. Voyager Digital Holdings Inc. and two affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 22-10943) on July 5, 2022. In the petition filed by Stephen Ehrlich, chief executive officer, the Debtors estimated assets and liabilities between $1 billion and $10 billion. Judge Michael E. Wiles oversees the cases. The Debtors tapped Kirkland & Ellis, LLP as general bankruptcy counsel; Berkeley Research Group, LLC as financial advisor; Moelis & Company as investment banker; Consello Group as strategic financial advisor; Deloitte Tax, LLP as tax services provider; and Deloitte & Touche, LLP as accounting advisor. Stretto, Inc., is the claims agent. On July 19, 2022, the U.S. Trustee for Region 2 appointed an official committee of unsecured creditors in the Chapter 11 cases. The committee tapped McDermott Will & Emery, LLP as bankruptcy counsel; FTI Consulting, Inc. as financial advisor; Cassels Brock & Blackwell, LLP as Canadian counsel; and Epiq Corporate Restructuring, LLC as noticing and information agent. The committee also tapped the services of Harney Westwood & Riegels, LP, in connection with Three Arrows Capital Ltd.'s liquidation proceedings in British Virgin Islands. On July 6, 2022, the Debtors filed a joint Chapter 11 plan of reorganization. * * * Following an auction process, the Debtors in September 2022 selected the bid submitted by FTX US' West Realm Shires Inc. as the winning bid for the assets. But after a series of events, FTX collapsed in November 2022, before the sale could be completed. After reopening bidding, Voyager Digital selected the offer from U.S. exchange BAM Trading Services Inc. (doing business as "Binance.US") as the highest and best bid for its assets. Binance's bid is valued at $1.022 billion. In April 2023, Binance.US called off its deal to buy assets of bankrupt crypto lender Voyager Digital, citing a "hostile and uncertain regulatory climate." VOYAGER DIGITAL: Wind-Down Plan Approved by Court ------------------------------------------------- Voyager Digital has received the green light from a U.S. bankruptcy court to wind down its operations and return its remaining assets to customers. According to Bloomberg, Judge Michael Wiles approved Voyager's liquidation procedures Wednesday, May 24, 2023, about a month after Binance.US terminated an agreementto purchase the crypto platform and after a deal to sell itself to FTX last year fell apart. Voyager customers will get about 36% of what they're owed but their recovery could increase if the firm succeeds in a pending dispute with FTX, according to court documents. Investing.com reports that Voyager Digital took to Twitter on 18 May to inform its customers that bankruptcy judge Michael Wiles approved its liquidation procedures. Judge Wiles acknowledged the customers' dissatisfaction with his overseeing of Voyager's Chapter 11 proceedings. He clarified that liquidation was the best course of action for the crypto lender, given that it didn't have enough assets to fully repay the customers. According to the roadmap shared by Voyager, the Chapter 11 plan may go into effect as soon as May 19, 2023. Once the plan becomes effective, the Voyager Official Committee of Unsecured Creditors will be dissolved and the Plan Administrator will take control of the Wind Down Debtor. The bankruptcy estate is currently working out the repayment details and plans to make the initial distributions before 1 June. As for the repayment, the bankrupt crypto lender will only be returning 35% of the customers' claim amount. The remaining will be held back until claims disputes with third parties are resolved. As per the liquidation procedures filed earlier this month, Voyager's bankruptcy estate currently has a little over $1.3 billion in assets, which represent 75% of the amount owed to customers. Of this, $445 million will be held back for preference claims related to FTX and Alameda Research. And $135 million will be held back for wind down costs and the form's litigation reserve. Another $49 million will be retained for administrative claims, leaving $629 million for the crypto lender's customers. About Voyager Digital Holdings Based in Toronto, Canada, Voyager Digital Holdings Inc. -- https://www.investvoyager.com/ -- runs a cryptocurrency platform. Voyager claims to offer a secure way to trade over 100 different crypto assets using its easy-to-use mobile application. Through its subsidiary Coinify ApS, Voyager provides crypto payment solutions for both consumers and merchants around the globe. Voyager Digital Holdings Inc. and two affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 22-10943) on July 5, 2022. In the petition filed by Stephen Ehrlich, chief executive officer, the Debtors estimated assets and liabilities between $1 billion and $10 billion. Judge Michael E. Wiles oversees the cases. The Debtors tapped Kirkland & Ellis, LLP as general bankruptcy counsel; Berkeley Research Group, LLC as financial advisor; Moelis & Company as investment banker; Consello Group as strategic financial advisor; Deloitte Tax, LLP as tax services provider; and Deloitte & Touche, LLP as accounting advisor. Stretto, Inc., is the claims agent. On July 19, 2022, the U.S. Trustee for Region 2 appointed an official committee of unsecured creditors in the Chapter 11 cases. The committee tapped McDermott Will & Emery, LLP as bankruptcy counsel; FTI Consulting, Inc. as financial advisor; Cassels Brock & Blackwell, LLP as Canadian counsel; and Epiq Corporate Restructuring, LLC as noticing and information agent. The committee also tapped the services of Harney Westwood & Riegels, LP, in connection with Three Arrows Capital Ltd.'s liquidation proceedings in British Virgin Islands. On July 6, 2022, the Debtors filed a joint Chapter 11 plan of reorganization. * * * Following an auction process, the Debtors in September 2022 selected the bid submitted by FTX US' West Realm Shires Inc. as the winning bid for the assets. But after a series of events, FTX collapsed in November 2022, before the sale could be completed. After reopening bidding, Voyager Digital selected the offer from U.S. exchange BAM Trading Services Inc. (doing business as "Binance.US") as the highest and best bid for its assets. Binance's bid is valued at $1.022 billion. In April 2023, Binance.US called off its deal to buy assets of bankrupt crypto lender Voyager Digital, citing a "hostile and uncertain regulatory climate." WAVECREST ENTERPRISES: Court OKs Cash Collateral Access Thru June 8 ------------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California, Los Angeles Division, authorized Wavecrest Enterprises LLC to use cash collateral on an interim basis in accordance with the budget, through June 8, 2023. As previously reported by the Troubled Company Reporter, the subject collateral is a 10-unit apartment building located at 19 Wavecrest Avenue, Venice, CA 90291. The Debtor sought to use the rents generated from the property to pay utilities, maintenance, parking, property taxes and insurance. The Debtor asserts the equity in the Collateral is sufficient to adequately protect each lienholder's interests. The Court said all creditors secured with an interest in the cash collateral are granted replacement liens in the same priority and to the extent as their pre-petition liens. A continued hearing on the matter is set for June 8 at 10 a.m. A copy of the Court's order is available at https://urlcurt.com/u?l=hp37Nz from PacerMonitor.com. About Wavecrest Enterprises LLC Wavecrest Enterprises LLC is primarily engaged in renting and leasing real estate properties. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-11438) on March 14, 2023. In the petition signed by Raul Hinojosa, manager, the Debtor disclosed $6,505,000 in assets and $4,921,659 in liabilities. Judge Julia W. Brand oversees the case. Thomas B. Ure, Esq., at Ure Law Firm, represents the Debtor as legal counsel. ZIP MAILING: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: ZIP Mailing Services, Inc. 819 Brightseat Road Landover, MD 20785 Business Description: ZIP offers a complete range of digital printing, mailing, and distribution services to fit all of its customers' processing and fulfillment needs. Chapter 11 Petition Date: May 26, 2023 Court: United States Bankruptcy Court District of Maryland Case No.: 23-13736 Debtor's Counsel: Christopher L. Hamlin, Esq. MCNAMEE HOSEA, P.A. 6411 Ivy Lane, Ste. 200 Greenbelt, MD 20770 Tel: (301) 441-2420 Fax: (301) 982-9450 E-mail: chamlin@mhlawyers.com Total Assets: $269,986 Total Liabilities: $2,040,997 The petition was signed by Darryl Jackson, Jr. 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/PLMO74Y/ZIP_Mailing_Services_Inc__mdbke-23-13736__0001.0.pdf?mcid=tGE4TAMA [^] BOND PRICING: For the Week from May 22 to 26, 2023 ------------------------------------------------------ Company Ticker Coupon Bid Price Maturity ------- ------ ------ --------- -------- 99 Escrow Issuer Inc NDN 7.500 38.500 1/15/2026 99 Escrow Issuer Inc NDN 7.500 38.909 1/15/2026 99 Escrow Issuer Inc NDN 7.500 38.909 1/15/2026 AMC Entertainment Holdings Inc AMC 5.875 40.254 11/15/2026 Air Methods Corp AIRM 8.000 5.519 5/15/2025 Air Methods Corp AIRM 8.000 5.890 5/15/2025 Amyris Inc AMRS 1.500 24.087 11/15/2026 Applied Optoelectronics AAOI 5.000 75.523 3/15/2024 Audacy Capital Corp CBSR 6.500 3.047 5/1/2027 Audacy Capital Corp CBSR 6.750 4.968 3/31/2029 Audacy Capital Corp CBSR 6.750 4.367 3/31/2029 BPZ Resources Inc BPZR 6.500 3.017 3/1/2049 Bank of America Corp BAC 0.523 99.500 6/14/2024 Bed Bath & Beyond Inc BBBY 5.165 2.878 8/1/2044 Bed Bath & Beyond Inc BBBY 4.915 3.000 8/1/2034 Bed Bath & Beyond Inc BBBY 3.749 3.000 8/1/2024 Brixmor LLC BRX 6.900 9.875 2/15/2028 Citigroup Global Markets Holdings Inc/United States C 8.500 82.300 5/17/2032 Citizens Financial Group Inc CFG 6.000 80.000 N/A Citizens Financial Group Inc CFG 6.375 80.504 N/A Clovis Oncology Inc CLVS 1.250 12.120 5/1/2025 Clovis Oncology Inc CLVS 4.500 11.719 8/1/2024 Clovis Oncology Inc CLVS 4.500 12.250 8/1/2024 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 5.375 4.375 8/15/2026 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 5.375 4.750 8/15/2026 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 5.375 5.000 8/15/2026 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 5.375 4.750 8/15/2026 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 6.625 2.448 8/15/2027 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 5.375 4.162 8/15/2026 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 6.625 2.250 8/15/2027 Diebold Nixdorf Inc DBD 8.500 2.520 4/15/2024 Diebold Nixdorf Inc DBD 9.375 40.434 7/15/2025 Diebold Nixdorf Inc DBD 9.375 41.296 7/15/2025 Diebold Nixdorf Inc DBD 9.375 47.250 7/15/2025 Diebold Nixdorf Inc DBD 9.375 41.296 7/15/2025 Diebold Nixdorf Inc DBD 9.375 40.196 7/15/2025 Discover Bank DFS 4.682 91.350 8/9/2028 Endo Finance LLC / Endo Finco Inc ENDP 5.375 5.000 1/15/2023 Endo Finance LLC / Endo Finco Inc ENDP 5.375 5.000 1/15/2023 Energy Conversion Devices Inc ENER 3.000 0.551 6/15/2013 Envision Healthcare Corp EVHC 8.750 0.750 10/15/2026 Envision Healthcare Corp EVHC 8.750 0.511 10/15/2026 Esperion Therapeutics ESPR 4.000 41.750 11/15/2025 Exela Intermediate LLC / Exela Finance Inc EXLINT 11.500 11.663 7/15/2026 Exela Intermediate LLC / Exela Finance Inc EXLINT 11.500 11.754 7/15/2026 Federal Farm Credit Banks Funding Corp FFCB 0.230 100.000 6/1/2023 Federal Farm Credit Banks Funding Corp FFCB 0.200 100.000 6/1/2023 Federal Farm Credit Banks Funding Corp FFCB 2.270 100.000 6/1/2023 Federal Farm Credit Banks Funding Corp FFCB 1.800 100.000 6/1/2023 First Citizens Bancshares Inc/TX FIRCTZ 6.000 89.737 9/1/2028 First Citizens Bancshares Inc/TX FIRCTZ 6.000 89.737 9/1/2028 First Republic Bank/CA FRCB 4.375 3.078 8/1/2046 First Republic Bank/CA FRCB 4.625 2.322 2/13/2047 GNC Holdings Inc GNC 1.500 0.699 8/15/2020 General Electric Co GE 4.200 95.000 N/A Goldman Sachs Group Inc/The GS 2.700 99.771 5/29/2023 Goodman Networks Inc GOODNT 8.000 1.000 5/31/2022 Gossamer Bio Inc GOSS 5.000 31.879 6/1/2027 Groupon Inc GRPN 1.125 35.125 3/15/2026 H-Food Holdings LLC / Hearthside Finance Co Inc HEFOSO 8.500 42.665 6/1/2026 Inseego Corp INSG 3.250 42.299 5/1/2025 Invacare Corp IVC 4.250 4.766 3/15/2026 Invacare Corp IVC 5.000 1.625 11/15/2024 JPMorgan Chase & Co JPM 1.514 99.969 6/1/2024 JPMorgan Chase & Co JPM 6.735 97.994 6/15/2023 JPMorgan Chase & Co JPM 2.000 85.700 8/20/2031 JPMorgan Chase Bank NA JPM 2.000 81.230 9/10/2031 KeyBank NA/Cleveland OH KEY 0.433 94.974 6/14/2024 Lannett Co Inc LCIN 7.750 7.500 4/15/2026 Lannett Co Inc LCIN 4.500 2.709 10/1/2026 Lannett Co Inc LCIN 7.750 7.603 4/15/2026 Lightning eMotors Inc ZEV 7.500 54.183 5/15/2024 MBIA Insurance Corp MBI 16.520 5.500 1/15/2033 MBIA Insurance Corp MBI 16.736 2.000 1/15/2033 Macy's Retail Holdings LLC M 6.900 86.809 1/15/2032 Macy's Retail Holdings LLC M 6.900 86.809 1/15/2032 Mashantucket Western Pequot Tribe MASHTU 7.350 41.207 7/1/2026 MoneyGram International Inc MGI 5.375 102.014 8/1/2026 Morgan Stanley MS 1.800 71.400 8/27/2036 National CineMedia NATCIN 5.750 2.625 8/15/2026 New York Community Bancorp Inc NYCB 5.900 91.586 11/6/2028 OMX Timber Finance Investments II LLC OMX 5.540 0.850 1/29/2020 Old Second Bancorp OSBC 9.009 97.842 12/31/2026 Pacific Western Bank PACW 3.250 37.772 5/1/2031 Party City Holdings PRTY 8.750 14.875 2/15/2026 Party City Holdings PRTY 10.130 14.500 7/15/2025 Party City Holdings PRTY 6.625 1.000 8/1/2026 Party City Holdings PRTY 8.750 15.000 2/15/2026 Party City Holdings PRTY 6.625 0.750 8/1/2026 Party City Holdings PRTY 10.130 12.674 7/15/2025 Photo Holdings Merger Sub Inc SFLY 11.000 37.875 10/1/2027 Photo Holdings Merger Sub Inc SFLY 8.500 55.040 10/1/2026 Porch Group Inc PRCH 0.750 32.375 9/15/2026 Rackspace Technology Global Inc RAX 5.375 25.708 12/1/2028 Rackspace Technology Global Inc RAX 5.375 24.303 12/1/2028 Radiology Partners Inc RADPAR 9.250 26.445 2/1/2028 Radiology Partners Inc RADPAR 9.250 27.498 2/1/2028 Renco Metals Inc RENCO 11.500 24.875 7/1/2003 Rite Aid Corp RAD 7.700 32.534 2/15/2027 Rite Aid Corp RAD 6.875 28.620 12/15/2028 Rite Aid Corp RAD 6.875 28.620 12/15/2028 RumbleON Inc RMBL 6.750 41.019 1/1/2025 SVB Financial Group SIVB 4.000 7.938 N/A SVB Financial Group SIVB 4.100 7.375 N/A SVB Financial Group SIVB 4.250 7.002 N/A SVB Financial Group SIVB 4.700 8.000 N/A Shift Technologies SFT 4.750 12.483 5/15/2026 Signature Bank/New York NY SBNY 4.000 1.000 10/15/2030 Signature Bank/New York NY SBNY 4.125 -1.206 11/1/2029 Talen Energy Supply LLC TLN 10.500 31.125 1/15/2026 Talen Energy Supply LLC TLN 6.500 30.875 6/1/2025 Talen Energy Supply LLC TLN 9.500 22.264 7/15/2022 Talen Energy Supply LLC TLN 6.500 22.250 9/15/2024 Talen Energy Supply LLC TLN 10.500 32.398 1/15/2026 Talen Energy Supply LLC TLN 6.500 43.750 9/15/2024 Talen Energy Supply LLC TLN 10.500 32.398 1/15/2026 Talen Energy Supply LLC TLN 9.500 22.264 7/15/2022 Team Health Holdings Inc TMH 6.375 42.824 2/1/2025 Team Health Holdings Inc TMH 6.375 43.648 2/1/2025 Team Inc TISI 5.000 79.920 8/1/2023 TerraVia Holdings Inc TVIA 5.000 4.644 10/1/2019 Tricida Inc TCDA 3.500 10.750 5/15/2027 US Renal Care Inc USRENA 10.625 29.812 7/15/2027 US Renal Care Inc USRENA 10.625 28.178 7/15/2027 UpHealth Inc UPH 6.250 30.871 6/15/2026 WeWork Cos Inc WEWORK 7.875 55.651 5/1/2025 WeWork Cos Inc WEWORK 7.875 55.234 5/1/2025 WeWork Cos LLC / WW Co-Obligor Inc WEWORK 5.000 46.192 7/10/2025 WeWork Cos LLC / WW Co-Obligor Inc WEWORK 5.000 48.395 7/10/2025 Wesco Aircraft Holdings Inc WAIR 9.000 9.500 11/15/2026 Wesco Aircraft Holdings Inc WAIR 8.500 4.500 11/15/2024 Wesco Aircraft Holdings Inc WAIR 13.125 8.500 11/15/2027 Wesco Aircraft Holdings Inc WAIR 13.125 7.605 11/15/2027 Wesco Aircraft Holdings Inc WAIR 8.500 11.875 11/15/2024 Wesco Aircraft Holdings Inc WAIR 9.000 9.265 11/15/2026 Western Global Airlines LLC WGALLC 10.375 6.919 8/15/2025 Western Global Airlines LLC WGALLC 10.375 12.489 8/15/2025 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. TCR subscribers have free access to our on-line news archive. Point your Web browser to http://TCRresources.bankrupt.com/and use the e-mail address to which your TCR is delivered to login. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Philadelphia, Pa., USA. Randy Antoni, Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Joel Anthony G. Lopez, Psyche A. Castillon, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2023. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $975 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Peter A. Chapman at 215-945-7000. *** End of Transmission ***